This study introduces the concept of well-calibrated professional skepticism, auditors’ ability to respond critically when misstatement risk is high without overreacting when risk is low. Using interviews, experiments, and surveys with 399 auditors, the research shows that well-calibrated skeptics make better judgments and plan appropriate actions, improving audit quality.
Auditor pride, however, does not significantly influence judgment. Key drivers of calibrated skepticism include supportive leadership, sufficient resources, and personal values such as truth-seeking and contributing to society.
The findings suggest that audit firms can strengthen skepticism through cultural controls and by hiring auditors who value integrity and societal impact.
