FAR Masterclass Report: Masterclass on Judgment Biases in Auditing

Although auditors are well-educated professionals, they are also human beings. This means that they are susceptible to judgment biases. Departing from psychological theories, four judgment biases were discussed during Anna Gold’s well-attended masterclass:

• Availability bias: the tendency to consider information that is easily retrievable from memory as being more likely, more relevant, and more important for a judgment.
• Anchoring bias: the tendency to insufficiently adjust away from an initial anchor.
• Overconfidence bias: the tendency to be overconfident in our judgment abilities.
• Confirmation bias: the tendency to seek and overweight confirming evidence.

It cannot be stressed enough: awareness of the existence of these judgment biases is an important first step in reducing their negative effects.