Kathy Hurtt is an Associate Professor at Baylor University. She is credited for her research on how auditors make judgment and more importantly, their decision making process, particularly on the impact of professional skepticism on the judgment and behavior of auditors. Furthermore, she is also recognized for developing a scale of evaluating professional skepticism which is clearly depicted in her research paper “Development of a Scale to Measure Professional Skepticism”. Her scale is based on six distinct characteristics of skeptics which are; suspension of judgment, search for knowledge, questioning the mind, interpersonal understanding, self-confidence and self-determination. Hurtt (2010) defines professional skepticism as the propensity of an individual to defer concluding until the evidence provides sufficient support for one alternative/explanation over others. Furthermore, her definition of professional skepticism is related to various characteristics of skeptics (e.g., a questioning mind, suspension of judgment, self-confidence) that focus more on having and pursuing doubt than on a particular direction of doubt (Hurtt, 2010). Her work is based on the relationship between traits of skeptical people and several skeptical behaviors.
Mark Nelson is an accounting professor and researcher. He is known for his paper “A Model and Literature Review of Professional Skepticism in Auditing”. Professional skepticism is a vital concept in auditing. The two foundational aspects of professional skepticism by Nelson (2009) proposes that lack of skepticism can either be the result of a failure in problem recognition (lack of skeptical judgment) or a failure to act on a problem recognized (lack of skeptical action).According to the 4 model developed by Nelson (2009) and extended by Hurtt et al. (2013), one of the four broad inputs to an auditor’s professional judgments is individual auditor characteristics. Individual auditor characteristics include the auditor’s trait professional skepticism, experience and training, and motivation. The model of trait professional skepticism is particularly crucial in auditing. According to Hurtt (2010), a trait is a relatively stable, enduring aspect of an individual and she posits a link between an auditor’s trait professional skepticism and skeptical judgments and actions. Alternatively, according to Nelson, the professional skepticism of an auditor is influenced by three factors namely; traits, knowledge, and incentives. Hurtt (2007) describes a systematic approach to assessing these characteristics by using a 30-question instrument, and uses factor analysis to demonstrate the uniqueness of each characteristic.
Prior research in psychology and accounting has identified that auditors’ judgments are vulnerable to various problems, such as difficulty recognizing patterns of evidence, applying prior knowledge to the current judgment task, weighting evidence appropriately, and preventing incentives from affecting judgment in unconscious ways (Nelson, 2009). All of those difficulties could affect the extent to which judgments reflect professional skepticism.
The difference between effectiveness and efficiency
The judgment made by auditors is vulnerable to several problems which include difficulty in recognizing patterns of evidence and incorporating unstructured data. An auditor is required to understand and be able to differentiate the meanings of these two terms. Effectiveness evaluation determines whether the system is achieving its objectives and whether the system should be continued, modified, upgraded, or scrapped. On the other hand, the efficiency of a system is reflected by usage of the minimum amount of resources to achieve its objectives. (Hingarh, 2013). Finally, auditors who possess higher understanding of professional skepticism are more likely to act systematically differently compared to less skeptical auditors.
Hurtt, R. Kathy. “Development of a scale to measure professional skepticism.” Auditing: A Journal of Practice & Theory 29.1 (2010): 149-171.
Hurtt, R. Kathy, et al. “Research on auditor professional skepticism: Literature synthesis and opportunities for future research.” Auditing: A Journal of Practice & Theory 32.sp1 (2013): 45-97.
Hingarh, Veena, and Arif Ahmed. Understanding and Conducting Information Systems Auditing. Singapore: John Wiley & Sons Singapore Pte. Ltd, 2013. Internet resource.
Nelson, Mark W., A Model and Literature Review of Professional Skepticism in Auditing (November 1, 2009). Auditing: A Journal of Practice and Theory, Vol. 28, No. 2, pp. 1-34, November 2009 ; Johnson School Research Paper Series No. 02-2011.