Determinants of Audit Judgment: A Structural Equation Modeling Analysis of Social and Cultural Intelligence

Abstract

Purpose: In the contemporary business environment, decision-making plays a pivotal role in organizational success, particularly within the auditing profession. This study aims to investigate the relationship between Cultural Intelligence (CQ), Social Intelligence (SQ), and the decision-making styles of auditors.

Methodology: The research adopts a descriptive-survey design with an applied objective. The statistical population comprises auditors working in the Audit Organization and private audit firms. A sample of 412 auditors was selected using simple random sampling. Data were collected using standard questionnaires, including Earley and Ang’s (2004) Cultural Intelligence Scale, the Tromsø Social Intelligence Scale (2001), and Scott and Bruce’s (1995) Decision-Making Style measure. The data were analyzed using Structural Equation Modeling (SEM) via the Partial Least Squares (PLS) method.

Key Findings: The results indicate a significant positive relationship between Cultural Intelligence and auditors' decision-making styles. Furthermore, a significant positive relationship was found between Social Intelligence and decision-making styles. Among the dimensions, metacognitive cultural intelligence and social information processing had the most substantial impact on decision-making.

Implications: The findings suggest that enhancing auditors' social and cultural competencies can lead to more effective decision-making processes, which is crucial for navigating the complex and diverse environments auditors face today.