Elucidating the Impact of Auditor Alertness on Audit Quality with Mediating Role of Emotional Intelligence

Subject Areas : Ethics in auditing

Davood Jouzdani ¹ , Mohammad Kashanipour ² , Azar Moslemi ³ , Mohsen Koohi Nasrabadi ⁴

1 - PhD., Student, Department of Accounting, Khom.C, Islamic Azad University, Khomein, Iran
2 - Department of Accounting, Faculty of Management and Accounting, Farabi College, University of Tehran, Qom, Iran
3 - Department of Accounting, Khom.C, Islamic Azad University, Khomein, Iran
4 - Department of Social Sciences, Payam Noor University, Tehran, Iran

Received: 2025-03-07 Accepted : 2025-10-31 Published : 2025-11-23

Keywords: Auditor Alertness, Audit Quality, Independent Auditors, Emotional Intelligence, Structural Equation Modeling (SEM).,

Abstract :

Purpose: In today's complex economic environment, audit quality plays a fundamental role in ensuring transparency and building trust within the financial reporting system. This quality relies on the ability of independent auditors to provide accurate, impartial, and timely assessments of the financial and control status of economic entities. Among these factors, "Auditor Alertness" serves as a vital monitoring mechanism, playing a decisive role in enhancing audit quality. Alertness is the process through which an auditor identifies, analyzes, and appropriately reports significant deficiencies in the internal control system, potential material risks, and errors and irregularities to relevant stakeholders. However, the success of this complex process is not solely dependent on the auditor's technical knowledge and professional expertise; it is also profoundly influenced by deep-seated behavioral and psychological factors. In this regard, "Emotional Intelligence," as a set of skills and capabilities including self-awareness, self-regulation, motivation, empathy, and social skills, can play a catalytic role in strengthening the relationship between alertness and audit quality. High emotional intelligence helps auditors effectively manage their own and others' emotions in stressful and ambiguous situations, establish effective communication, and ultimately make more sound professional decisions. Acknowledging a gap in the existing literature, which has not yet simultaneously examined these three variables within an integrated model, this research was conducted with the main objective of "Examining the relationship between independent auditors' alertness and audit quality with the mediating role of emotional intelligence" in the geographical context of auditing firms in Tehran.

Method: This study is applied in terms of purpose and descriptive-survey in terms of execution method. The statistical population consisted of all active auditors in auditing firms located in Tehran, totaling 200 individuals. Using Morgan's sampling formula and simple random sampling, a sample size of 130 individuals was selected. The primary data collection tool in the field section was a questionnaire, which included three separate parts: a questionnaire for measuring auditor alertness comprising 52 questions and eight dimensions (individual, managerial, organizational, professional, legal, auditing profession, environmental, and stakeholder factors); a questionnaire for measuring emotional intelligence based on Goleman's model comprising 33 questions and five dimensions (self-awareness, self-regulation, motivation, empathy, and social skills); and a questionnaire for measuring audit quality comprising 16 questions and four dimensions (management and leadership, professional quality, goal and mission, and customer value).

Findings: The reliability of the research instrument was confirmed using two indicators: Cronbach's alpha and Composite Reliability (CR), the values of which for all constructs were above 0.90. Validity: The validity of the instrument was also confirmed from two aspects: convergent validity (by calculating the AVE index, the values of which for all constructs were above 0.5) and discriminant validity (using the Fornell-Larcker criterion). For data analysis and testing the research hypotheses, Structural Equation Modeling (SEM) was employed using SMART PLS software. The theoretical framework of the research was also based on two key theories: the Theory of Planned Behavior (Ajzen) and Emotional Intelligence (Goleman).

Findings and Data Analysis:

- Hypothesis 1: Independent auditors' alertness has a positive, direct, and significant impact on audit quality (Path Coefficient: 0.472). This means that increasing auditors' ability and willingness to be alert directly leads to an enhancement in the ultimate quality of audit services.

- Hypothesis 2: Independent auditors' alertness has a positive and direct impact on their emotional intelligence (Path Coefficient: 0.996). This finding indicates that the act of being alert itself is an experiential learning process and leads to the strengthening of auditors' emotional skills.

- Hypothesis 3: Emotional intelligence directly and significantly leads to improved audit quality (Path Coefficient: 0.525). This result attests to the importance of developing emotional capabilities alongside auditors' technical skills.

- Hypothesis 4: showed that emotional intelligence plays a significant mediating role in the relationship between independent auditors' alertness and audit quality.

The ranking of the dimensions for each variable using the model showed:

- Among the alertness dimensions, the "Auditing Profession" factor with a weight of 0.995 was the most important, and the "Stakeholders" factor with a weight of 0.988 was the least important from the respondents' perspective.

- Among the audit quality dimensions, "Professional Quality" with a weight of 0.994 was identified as the most important factor, while "Management and Leadership" and "Customer Value" with a weight of 0.990 were recognized as the least influential factors.

- Among the components of emotional intelligence, "Self-Regulation" and "Self-Awareness" with a weight of 0.995 held the highest importance, and "Social Skill" with a weight of 0.991 had the lowest level of importance.

Conclusion: This research simultaneously emphasizes the role of alertness and emotional intelligence in enhancing audit quality within an integrated model. The findings confirm that effective auditor alertness not only directly increases audit quality but also indirectly improves the audit process quality through the enhancement of emotional skills (such as self-awareness and self-regulation). This finding provides a deeper understanding of the psychological mechanisms governing the professional auditing environment. Therefore, simultaneous attention to auditors' alertness capacity and strengthening their emotional intelligence plays a vital and strategic role in enhancing audit quality and, ultimately, consolidating public trust in the capital market. Accordingly, it is suggested that auditing firms and professional bodies, such as the Audit Organization, take fundamental and practical steps towards the continuous improvement of audit performance by: strategically investing in the design and implementation of specialized training workshops to cultivate emotional intelligence (focusing on self-awareness and self-regulation); incorporating emotional intelligence assessment criteria into auditor recruitment and evaluation processes; and also creating safe organizational, cultural, and protective platforms for the effective, unhesitating, and constructive expression of alerts. For future research, investigating the role of other mediating variables such as organizational culture or ethical leadership, and employing mixed methods (qualitative-quantitative) for a deeper analysis of these relationships is recommended.

 

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