Materiality and the Financial Auditor’s Risk Behaviour

Author:Professor Eugeniu ŢURLEA, Ph. D., Iancu Octavian IONESCU, Ph. D. Student

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Keywords:materiality, risk, financial audit, risk behaviour, correlation

Abstract:
The concept of materiality has been at the center of many academic research studies from 1970 to present day. Despite all the interest, little is known about the factors that influence the professional judgement of the financial auditor when setting the materiality level. In line with research studies that consider professional judgement a cognitive process and adding the risk behaviour dimension, this article examines the relationship between materiality and the risk behaviour of the financial auditor. Specifically, the research question asks whether the setting of the materiality level is influenced by the financial auditor’s risk behaviour. The analysis of data collected from a sample of 91 accounting and audit postgraduate students revealed that there is a strong correlation between the financial auditor’s risk behaviour and the materiality level, confirming the research hypothesis. \r\n\r\n

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