Modeling the Materiality Judgments of Audit Partners.

Researchers have previously found that different materiality thresholds explain some of the difference between auditors' materiality judgments. By treating materiality as an ordinally scaled variable rather than as a nominally scaled variable, and by using the conjoint measurement methodology, the study reported in this paper was able to focus on two other possible sources of differences-the form of the individual auditor's decision model and the scaling of levels of contributing variables. The study revealed that there were some differences in the form of auditors' decision models. The study also provided evidence that auditors scaled the contributing variables differently. Thus future efforts to explain auditors materiality decisions must give consideration to these two factors (rather than assuming additive models and linear part-worth functions for all auditors). The research methodology presented in this paper provides the researcher with a tool which will allow investigation of these two factors. [ABSTRACT FROM AUTHOR]