Judgment and decision making

Judgment and decision making (JDM) research in auditing ¹ is undertaken to understand how individual and group judgments and decisions ² in auditing are made and how to improve those judgments. References to the need for judgments are very common in auditing standards and, in fact, the whole process of auditing is permeated by professional judgment. For example, consider the broad range of judgments and decisions auditors make: plan the amount and type of evidence to collect; determine fraud risk factors; search for and obtain evidence; determine the level of professional skepticism to exercise; review the work of others; and make assessments of internal control, materiality, fair value, going concern and the reliance to be placed on the work of internal auditors and other experts.