Theory of Mind, Auditor Professional Skepticism, and Audit Quality

Document Type : Research Paper

Authors

1 PhD., Department of Accounting, Faculty of Management and Economic, Tarbiat Modares University, Tehran, Iran.

2 Associate Prof., Department of Accounting, Faculty of Management and Economic, Tarbiat Modares University, Tehran, Iran.

10.22059/acctgrev.2025.394076.1009094

Abstract

Objective
This study aimed to examine the impact of auditors’ mind-reading abilities-assessed through their interpretation of others’ eyes and interpersonal reactions - on four components: perspective-taking, imagination, empathic attention, and personal distress. Additionally, the study explored the moderating role of these abilities in the relationship between professional skepticism and audit quality.
Methods
The study adopted an applied research design. Data collection and the final result for testing the rejection or acceptance of the hypothesis were done inductively by Hart's (2013) professional skepticism questionnaires, Baron-Cohen's mind-reading (2001), Davis's interpersonal reactions (1983), and Armgazarfar's (2015) audit quality. The reliability of the questionnaire was examined through Cronbach's alpha. The composite reliability and the extracted variance value, its test and validity were tested by comparing the root mean square of the extracted variance of each variable with the correlation of that variable with other variables. The results were obtained after analyzing the responses of 330 auditors working in auditing institutions, members of the Iranian Certified Public Accountants Society, and the Auditing Organization in the Iranian Calendar year 1402, using variance-based structural equation modeling (SEM) with PLS software.
Results
In this study, two hypotheses were examined. The first hypothesis examined the effect of the theory of mind on professional skepticism levels. This hypothesis was accepted, and the results confirmed that there existed a positive and significant relationship between mind-reading ability and auditors' professional skepticism levels, including questioning mind, judgment suspension, knowledge seeking, Interpersonal understanding, self-confidence, and self-determination. In the second hypothesis, theory of mind was examined as a moderating variable, and its strength and direction on the relationship between professional skepticism and audit quality were examined. The second hypothesis was also accepted, and the results confirmed the degree of influence of the professional skepticism variable and audit quality in the presence of the theory of mind as the moderating variable.
Conclusion
The findings indicated a positive and significant relationship between the theory of mind and auditors’ professional skepticism. In other words, auditors with higher mind-reading ability—who can better distinguish false beliefs from truth—tend to exhibit higher levels of professional skepticism. Also, theory of mind moderates and improves the relationship between professional skepticism and audit quality, and it can be said that in the implementation of professional skepticism by auditors, auditors who had higher Mind-reading ability performed audits with higher quality. "Considering the results of this study and the positive effect of theory of mind on professional skepticism, these findings represent an important contribution to the community of certified public accountants and the auditing organization. By assessing the mind-reading abilities of prospective auditors during recruitment, audit firms and organizations can select individuals with higher theory of mind, thereby promoting greater professional skepticism and ultimately enhancing audit quality.

Keywords

Main Subjects

References

 
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Accounting and Auditing Review
Volume 32, Issue 4
2025
Pages 821-844

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