Effects of Differences in National Culture on Auditors’ Judgments and Decisions: A Literature Review of Cross-Cultural Auditing Studies from a Judgment and Decision Making Perspective

Posted: 13 Aug 2018

See all articles by Christine J. Nolder

Christine J. Nolder

Suffolk University

Tracey Riley

Suffolk University - Sawyer School of Management

Date Written: November 30, 2013

Abstract

Motivated by the growing cultural diversity of new hires in audit firms, this paper reviews the literature on cross-cultural differences in auditors’ judgment and decision making (JDM). The overarching aim of the review is to summarize the current state of knowledge and compare our understanding of cross-cultural auditors’ JDM with the broader cross-cultural JDM research in psychology to stimulate applied research. We develop a framework that categorizes those auditor judgments and decisions most likely affected by cross-cultural differences. The categories include auditors’ confidence, risk and probability judgments, risk decisions, conflict decisions, and ethical judgments. We contribute to the cross-cultural audit research in four ways. First, we provide a framework by which future research can be synthesized within auditing and compared with psychology. Second, we recommend specific research questions to respond to both the gaps in extant literature and the changing multicultural environment of audit firms. Third, we advocate for an alternative theoretical approach beyond the examination of cultural traits. Finally, we argue that bicultural auditors represent an unexplored boundary condition on prior findings that warrants more immediate attention from audit researchers.

Keywords: culture, ethics, risk, conflict, probability, bicultural, overconfidence

Suggested Citation

Nolder, Christine J. and Riley, Tracey, Effects of Differences in National Culture on Auditors’ Judgments and Decisions: A Literature Review of Cross-Cultural Auditing Studies from a Judgment and Decision Making Perspective (November 30, 2013). Auditing: A Journal of Practice & Theory, Vol. 33, No. 2, 2014, Available at SSRN: https://ssrn.com/abstract=3220630

Christine J. Nolder (Contact Author)

Suffolk University ( email )

Boston, MA 02108
United States

Tracey Riley

Suffolk University - Sawyer School of Management ( email )

Boston, MA 02108
United States

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