Conservatism in Materiality Judgements: The Effect of Auditor’s Sex and Culture

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The concept of materiality permeates the audit process and is often used to describe the scope of the auditor’s responsibility to the public. Good materiality judgements are crucial for the conduct of an efficient and qualitative audit. Despite the importance of materiality, little is known about how auditors assess materiality. Professional bodies and regulatory authorities remain cautious in publishing rules of thumb or guidelines on the calculation of materiality. The determination of materiality is to a large extent left to the professional judgment of the auditor. Recent research indicates that audit outcomes can be influenced by individual auditor characteristics. In this paper, we examine whether the sex and the socio-cultural background of auditors affect their materiality judgements to be either conservative or aggressive. We analyze the final written ability exam of 160 future Belgian auditors including an evaluation materiality task. Belgium is historically divided into two regions: the Dutch-speaking region in the North (Flanders) and the French-speaking region in the south (Wallonia). The results indicate that female auditors as well as auditors with a French-speaking affiliation are, ceteris paribus, more likely to set lower materiality thresholds. Implications for the audit profession are discussed.
Original languageEnglish
Pages (from-to)70-85
Number of pages16
JournalOpen journal of accounting
Issue number4
Publication statusPublished - Oct 2020


  • Materiality, Conservatism, Gender, Culture

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