Document Type : Research Paper
Authors
1 Student at Islamic Azad University, Tabriz Branch
2 Department of Accounting, TA.C., Islamic Azad University, Tabriz, Iran
Abstract
1. Introduction
Independent auditors’ decision-making has always been of great importance due to its complex nature, inherent uncertainty, and far-reaching effects on the credibility of financial reporting and investors’ trust. During the audit process, auditors face a vast amount of information, evidence, and complex issues that challenge their professional judgment. The stability, consistency, and reliability of these judgments under time pressure, organizational constraints, economic conditions, and legal requirements give rise to a crucial concept known as decision-making stability. This stability not only ensures the quality of financial reporting, but also strengthens the social capital of the auditing profession. However, the research literature in Iran has paid limited comprehensive attention to identifying and modeling the factors affecting this stability. Therefore, the main objective of this study has been to address this theoretical and practical gap by identifying, explaining, and prioritizing the factors influencing the decision-making stability of independent auditors in Iran, and by providing a comprehensive and localized framework for improving this vital process. This study seeks to determine which factors in the individual, organizational, environmental, and professional levels play the greatest role in strengthening or weakening judgment stability, how these factors are causally related, and which of them serve as foundational and driving forces. Ultimately, the applied goal of the study is to provide a practical model for professional policymakers, audit firm managers, and educational institutions in order to enhance the stability and reliability of auditors’ decisions.
2. Materials and Methods
To achieve the above objectives, this research adopted a mixed exploratory-structural approach. In the first phase, the fuzzy Delphi technique was used to identify and refine the initial variables affecting decision-making stability. This method was considered highly appropriate for this stage because of its ability to collect expert opinions, achieve consensus, and reduce the effect of individual biases. The expert group in this phase consisted of 10 university professors, partners of audit firms, and prominent professional specialists with significant academic and practical experience. The Delphi process was conducted over three rounds, and in each round the items extracted from the theoretical literature and initial interviews were evaluated. Using fuzzy logic, the degree of agreement and the dispersion of opinions were analyzed, and in the end, 179 items were approved by the experts as final indicators. These items were considered capable, in terms of importance and conceptual stability, of explaining decision-making stability. In the second phase, to analyze causal relationships and determine the hierarchical structure among the identified factors, Interpretive Structural Modeling (ISM) was employed. This method is highly effective for mapping complex and directional relationships among variables, especially in social and organizational systems. For implementing this model, a questionnaire was designed based on the items confirmed in the Delphi phase and distributed among 300 independent auditors. After collecting and analyzing the data using specialized software, the relationships among the factors were determined and their different levels of importance were identified. This two-stage approach made it possible to identify the factors comprehensively and to gain a deep understanding of the relationships among them.
3. Results and Discussion
The research findings led to the identification of eight key factor categories and the presentation of a comprehensive model for the decision-making stability of independent auditors in Iran. These factors include: Situational, Occupational, and Work Pressures (C1); Cognitive, Skill-Based, and Knowledge Factors (C2); Technology, Tools, and Executive Methods (C3); Decision-Making Stability and Its Consequences (C4); Organizational, Managerial, and Cultural Factors (C5); Independence, Professional Governance, and Public Trust (C6); Environmental, Economic, and Legal Factors (C7); and Individual, Psychological, and Ethical Factors (C8). Analyses based on the ISM model revealed that these factors possess a hierarchical and dynamic structure. At the lowest and most foundational level of the model are factors that play the most driving role; these include cognitive, skill-based, and knowledge factors (C2) (such as analytical ability, experience, and specialized knowledge), individual, psychological, and ethical factors (C8) (such as resilience, self-control, and professional integrity), and independence, professional governance, and public trust (C6) (which provide the necessary institutional framework for independent judgment). At the intermediate level are factors such as organizational, managerial, and cultural factors (C5) and work and situational pressures (C1), which act as facilitating or moderating factors and can either strengthen or weaken the influence of the foundational factors. At the higher and framework-forming levels are environmental, economic, and legal factors (C7) and technology, tools, and executive methods (C3), which provide the overall context and platform for the auditor’s activity. Finally, decision-making stability and its consequences (C4) were identified as the main output and the highest level of this complex system. This hierarchical structure indicates that decision-making stability is the result of multifaceted and systemic interactions among variables and cannot be reduced to a single dimension.
4. Conclusion
The results of this study have significant theoretical and practical implications. From a theoretical perspective, by presenting a localized, comprehensive, and causal model for the decision-making stability of independent auditors in Iran, this research has substantially enriched the scholarly literature in the fields of auditing and professional behavior. Discovering the hierarchical relationships and identifying the foundational (driving), mediating, and framework-forming factors provides a more systemic and in-depth perspective on professional judgment phenomena, extending beyond simple correlational analyses. From a practical standpoint, the research findings offer valuable practical guidance for various stakeholders. For policymaking and professional oversight bodies, these results can serve as a basis for designing policies to strengthen auditor independence, revise regulations, and improve quality assurance. Audit firm managers can focus on organizational and cultural factors (C5) and by providing a supportive environment, manage work pressures (C1), thereby enhancing decision-making stability among their staff. Furthermore, training programs should concentrate on strengthening the cognitive, skill-based, and psychological factors (C2 and C8) of auditors. Optimal utilization of modern technologies (C3) can also serve as a facilitating factor, enhancing the quality and stability of professional judgment. Ultimately, understanding these complex relationships will lead to improved credibility of financial reporting and increased investor confidence as the final outcome (C4). Thus, by offering a deeper understanding of the factors influencing decision-making stability, this research has charted a practical roadmap for enhancing the quality and reliability of the auditing profession in Iran.
Keywords: Decision-making stability, Independent auditors, Factors influencing decision-making, Interpretive Structural Modeling.
Keywords
- decision-making sustainability
- independent auditors
- factors affecting decision-making
- interpretive structural modeling
- Audit quality
Main Subjects
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