Professional Judgment

Professional judgment is used in many different professions and can carry different meanings. According to Dr. Robert D. Busch of the University of New Mexico professional judgment is defined as “the process of forming an opinion or evaluation (characterized by or conforming to the technical or ethical standards of a calling requiring specialized knowledge and often long and intensive academic preparation) by discerning and comparing (Busch).” His definition is specified for the engineering profession but is general enough to where it can be applied to multiple professions including the field of accounting. All in all professional judgment is making sound and supported decisions based on one’s education, experience and ethics.

In accounting professional judgment is an increasingly important topic. Professional judgment is closely tied to auditing but is critically important on a more broad scale within the accounting profession. The work of an accountant should be highly scrutinized to see whether or not professional judgment was used in an appropriate manner. Without proper professional judgment there would be no consistency throughout the accounting profession.

An accountant’s base for professional judgment starts with education. With the proper education an accountant will have a solid knowledge base and understanding of accounting principles and standards. This knowledge base will help ensure that an accountant’s decisions and thought processes can be supported by established and authoritative set of guidelines.

Education alone is not always enough make decision and opinions based on professional judgment. Experience is also important for an accountant’s professional judgment. An accountant may have a good grasp on accounting principles and standards but not all transactions may be within the range of current standards. Experience will give an accountant additional knowledge needed to strengthen their overall professional judgment. Accountants can learn...