The Impact of Objectivity, Political Communication Skills, and Social Undermining on Auditors’ Professional Skepticism and Its Role in the Willingness to Report Detected Frauds

Abstract

This study investigates the impact of objectivity, political communication skills, and social undermining on auditors’ professional skepticism and explores how this skepticism influences their willingness to report detected fraud. Financial transparency and increased public trust in audit reports are among the main goals of this research. Auditors, as independent financial observers, must maintain high levels of impartiality and precision in their judgment processes and avoid any bias or external influence. The present study aims to examine the factors affecting this professional impartiality and independence. The research employed a descriptive-correlational design and utilized Structural Equation Modeling (SEM) to test the conceptual model. The statistical population consisted of members of the Iranian Association of Certified Public Accountants who were either employed or partners in auditing firms during the winter of 2024. Data were collected using a standardized questionnaire comprising items related to the research variables. The sample size was determined using Cochran’s formula, and data analysis was conducted with AMOS version 26 software. The findings revealed that objectivity (impact coefficient = 0.59) and political communication skills (impact coefficient = 0.50) have significant and positive effects on auditors’ professional skepticism. Conversely, social undermining showed a significant negative impact (impact coefficient = -0.04) on this variable. Furthermore, it was found that professional skepticism, as an independent variable, directly increases auditors’ willingness to report detected fraud. This indicates that auditors with higher levels of professional skepticism are more likely to report violations and prevent the dissemination of misleading information. This study emphasizes that strengthening objectivity and political communication skills among auditors leads to improved quality in professional judgment and enhances financial transparency. Additionally, social and organizational pressures that compromise auditors’ independence and impartiality must be controlled and reduced, as these factors can decrease the accuracy and reliability of audit reports. The findings of this study can be useful for regulatory bodies, financial policymakers, and auditing organizations to help elevate professional auditing standards. It is recommended that training programs be developed to reinforce auditors’ professional skepticism and communication skills, enabling them to maintain independence and impartiality in the face of social and organizational pressures. Finally, future research should examine the influence of other individual and organizational variables on professional skepticism and fraud reporting and apply advanced analytical tools such as artificial intelligence and machine learning to enhance fraud detection processes.