The Impact of professional experience on the auditor professional judgment regarding the ability of the firm to continue its operations: The case of Libya

Abstract

The research aims to identify the impact of professional experience of external auditor in Libya on the quality of his judgments when evaluating firm’s ability to continue its operations. In order to achieve this objective, we used the experimental approach using an experimental group which consists of 15 cases for a virtual company. Each case includes a different group of (7) items of financial and non-financial, positive and negative indicators. The auditor is asked to judge firm’s ability to continue based on seven-point likert scale. Using a sample of 136 auditors in 2013 and according to the suitable statistical tests, the research found that there are statistically significant differences among auditors in Consistency and consensus on professional judgment regarding continuity. These differences are attributed to the years of experience, i.e. the professional experience impacts on the professional judgment of the Libyan external auditor when evaluating firm’s ability to continue its activity.