The Role of Transformational Leadership in Auditor Knowledge Management and Judgment Processes

Zarifrad, Sirous; Pourzamani, Zahra

doi:10.30495/ijfma.2023.73272.2016

The Role of Transformational Leadership in Auditor Knowledge Management and Judgment Processes

Document Type : Original Article

Authors

Department of Accounting, Central Tehran Branch, Islamic Azad University, Tehran, Iran

10.30495/ijfma.2023.73272.2016

Abstract

Auditors are the pillars of audit firms in which knowledge is created and shared among auditors. Transformational managers and leaders determine the quality of the knowledge and judgments (decisions) that are shared between them and auditors. In this study, we explore the role of transformational leadership in auditor knowledge management (KM) and judgment processes. The required data were collected from the responses of 297 certified accountants and professional managers of audit firms, with IACPA membership, to a questionnaire sent to them via email. The obtained data were analyzed, using partial least squares (PLS) and variance-based structural equation modeling (SEM). The data analysis showed that transformational leadership had a positive and significant effect on the KM processes (knowledge creation, transfer, utilization, and retention) of the auditors, and the auditor KM processes, in turn, had a positive and significant effect on audit decision making and judgment. Among the limitations of this study are the exclusive use of cross-sectional analysis and the absence of moderating factors. This study gives insight into the role of transformational leadership in auditor KM and judgment processes and helps to identify the conditions (criteria) which are to be considered in appointment of auditors and can make sure that auditors share their knowledge for the benefits of the community at large, inside and outside the country.

Keywords

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