Scenario Planning and Foresight of Dividend Policies, Client Pressure, and Auditors’ Professional Judgment

Niloufar  Fareghi; Mohammad  Mahmoodi; Seyedeh Atefeh  Hosseini

Authors

Niloufar Fareghi Department of Accounting, Fi.C., Islamic Azad University, Firoozkooh, Iran Author https://orcid.org/0009-0004-1432-4513
Mohammad Mahmoodi Department of Accounting, Fi.C., Islamic Azad University, Firoozkooh, Iran https://orcid.org/0000-0003-1440-6055
Seyedeh Atefeh Hosseini Department of Accounting, Fi.C., Islamic Azad University, Firoozkooh, Iran Author https://orcid.org/0000-0002-8555-754X

Keywords:

dividend policy, client pressure, auditors’ professional judgment

Abstract

Auditors’ professional judgment is influenced by a range of financial, organizational, and environmental factors, among which dividend policies and client pressure are particularly important. The present study aimed to conduct scenario planning and foresight analysis of the effects of dividend policies and client pressure on auditors’ professional judgment. The study employed a futures research approach using scenario analysis. Data were collected through interviews with 23 experts, including university professors, certified public accountants, audit firm partners, and financial managers. Using the Delphi method, the key drivers influencing the phenomenon were identified and ranked. The findings indicated that, among 35 initially identified drivers, 20 key factors were confirmed for analyzing the future of auditors’ professional judgment. The ranking results showed that dividend policies, client dependence, stock exchange regulations, professional ethics, corporate governance, and operational risk were among the most influential factors shaping the future of auditors’ judgment. The scenarios further demonstrated that a combination of an aggressive dividend policy, intense client pressure, and weak control mechanisms could increase the risk of misstatement and undermine auditor independence. Conversely, strong corporate governance, effective internal controls, the adoption of emerging technologies, and a balanced dividend policy can provide an appropriate foundation for improving financial reporting quality and supporting independent auditor judgment. The findings of this study may be used to design regulatory mechanisms and enhance audit quality.

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