Can you teach professional judgement?

On Thursday, 23 May 2024, Sir Andrew Likierman talked about how a better understanding of what makes good judgement helps students learn about it.


Sir Andrew Likieman

Certainly as far as professions are concerned, I mean, what distinguishes a profession and a professional, is judgement. I mean, professional judgement is supposed to be at the heart of what professions are and what they do. And that applies not just to the accounting field, but to medicine, to law, engineering, whatever it is.

So, I mean, my sense is this is not something which is kind of, oh, well, you know, who knows what professional judgement is, you know, too bad. Can’t define it. I think it’s rather important to pin it down, particularly since apparently it’s a matter of great credibility for any profession. All right, so where do the ideas come from that I’m about to go through?

I mentioned there’s very little literature on this. There’s quite a lot of literature on different aspects of judgement. Mainly in the psychology literature. But this isn’t really quite the same thing. A lot of it’s about the basis on which people take decisions, which is not quite the same thing. So I’ve looked at quite a lot of different literatures, probably more than a dozen, and I’ve talked to an awful lot of people around the world, probably around 800, which is a lot of people, to get a sense of what is this business judgement?

What does it mean to you? How do you exercise it, how do you recognize it? And so on. So, my sample is — I wouldn’t say it’s a systematic sample — it’s based on people in many different walks of life. Some extremely famous. I’ve talked, for example, to Danny Kahneman, who some of you may know from Thinking Fast and Thinking Slow, before he died.

I’ve talked to people, distinguished people in many different walks of life and many practitioners. And for purposes of this subject today, I’ve talked to a lot of people in the accounting profession, all aspects of it, and in different parts of the world. So as a result of that, what I’ve done is I’ve produced an article which was published in Harvard Business Review in 2020, giving the basis of the framework which I set out.

I’ve then published in a number of different areas. And in relation to this, what happened is in 2021, the Financial Reporting Council came to me and said, could I help them in producing what was then was their guidance came out in 2022 on professional judgement. That was because I was in contact with Donald Brydon, suggesting that he should recommend that there should be a professional judgement framework, and which he accepted, which is very nice of him.

Since then, I’ve done a CPD course for the ICAEW, and that came out a couple of weeks ago, and it was at the launch actually, the Accounting Cafe people asked me to come and talk about this. So quite a lot has happened, and I’ve been trying to do this in a number of different fields, because accounting is close to my heart, as it were, I felt that I really would like to do something in this area if I could.

All right. So there’s the background to it. So what have I . . . what’s the main conclusions? I won’t go into all the details, but what are the main conclusions here? Because if one’s going to teach this, you know, what is it exactly one is teaching?

So the first important conclusions that I reached is that judgement is a process. It’s not something which is sort of comes out of the ether, or you’ve either got it or you haven’t, or you know, who knows what it is, but where we just sort of wing it somehow or other. I believe it is a process, and it’s a process with a number of stages.

but first of all, I wanted to define judgement, because it seemed to me that one of the difficulties was that there often is no definition of what judgement is, let alone professional judgement. Just give you an example. Company directors are required under section 173 of the Companies Act to exercise independent judgement. But there is no definition of independent judgement.

So you if you’re a director, you have to kind of guess what that is. So I had a stab at doing that. And I have defined judgement on the board, and I produced something for the Chartered Governance Institute on what is independent judgement. So my definition is based on the combination of, personal qualities. So I believe it’s the combination of the personal qualities that somebody brings to a judgement they’re going to make, combined with the relevant knowledge and experience that they have.

So it’s who you are, the personal qualities you bring combined with the relevant knowledge and experience. Now note the word relevant, because it’s not any knowledge and experience. It’s relevant to this particular judgement. So that’s the definition that I’ve got, and it’s an amalgam of many different definitions, some from the dictionary, some from practice, which I hope, exemplifies what needs to be done.

And what is the process that I’ve described? This is obviously incredibly important as far as teaching is concerned, because if it is a process, potentially it can be taught. And my suggestion is it’s six different things, it’s relevant knowledge and experience. So it’s what you’ve got when you arrive to make a choice. It is trust. Trust in the people and the data that you receive.

It is awareness. It’s what you take in from what goes on around you in this particular case, being aware of the people and the situation. It’s the feelings and beliefs that you have that you bring to the choice. It’s the way you make the choice itself, and then it’s your ability to deliver, because my sense is that there’s no use saying I’ve made a terrific judgement if you can’t deliver it. Now, that sounds like decision making, but with quite a lot added on.

But the other important element about judgement is it’s about forming opinions. And opinions, of course, don’t end up in a decision. They end up with somebody having a viewpoint and therefore

one of the big differences between judgement and decision making is that judgement incorporates opinions as well as decisions. So that’s a very brief summary of what the framework looks like and what the definition is.

Okay, so let me just move on to the question of why this is relevant, perhaps to the teaching context. Now, I’ve mentioned that what defines a profession is professional judgement . . . sorry, it’s one of the things that defines a profession. So for example we have a specialist, and a specialist is someone who knows a lot about something.

We have an expert, someone who knows a lot more than a specialist and is definably somebody who is expert in a particular area, but neither of those, I mean, are of any use, if I can put it that way, if they can’t be applied in particular contexts, and what professionals do is to apply their specialist knowledge and their expertise to a particular context.

When we go to a doctor, we expect the doctor to be able to identify what it is that’s wrong with us, not what isn’t wrong with us, not the other things that we haven’t come to him for. He may be a terrific expert, but we actually need, right now, to know what’s wrong with our foot or our, you know, whatever it is.

So that’s why professional judgement is not the same as expertise. And this is relevant very much to the question of how potentially could one teach this. It is context specific. Every judgement is different from every other judgement, which is a tough call as far as teaching is concerned, because it would be very nice if things actually could be grouped nicely so that they applied in any context.

But that is why judgement is a much more difficult concept than simply saying, well, you know, do we do this in these circumstances — that’s what the rule says. So, the first reason why, therefore we, I believe, need to teach this, is that it is essential to the notion of a professional. The second reason is that if you look at the reasons why the accounting regulator gets very agitated every year when they do their regular reports, professional judgement is one of the things that comes very high on the list every time in terms of problem areas for the firms that they monitor.

So, second reason for doing this is there seems to be some problems around here. The third reason comes back to the 19 . . . the 2022 guidance, of the Financial Reporting Council, which specifies — specifies, it doesn’t give it an option — that firms should exercise professional judgement. And the FRC has said they will be looking for evidence about the exercise of professional judgement.

So the regulator has now said that this is not an optional extra. This is something they require. So three reasons I suggest why we need to do something about teaching this. I’ve had a stab, I mentioned, that I’d had a stab . . . I’ve spent a number of months now working with the ICAEW to try and turn these ideas into something for the profession, and, this is now become a CPD online course.

One of the things we found most difficult was to get the right examples for this. And we worked with a group of professionals who, looked for the right kinds of areas that we might use to exemplify what professional judgement means. And if I, you know, if you think about almost any of the areas which are highly contentious in the field of accounting, they involve judgement. I mean, you simply need to think about almost any area which is complicated,

you’ve got professional judgement in there. And so we’ve got a group of professionals to write out a number of case studies to try and help us on the way. So that is all been done. So we’ve had a bash at this already. And, again, I would very much like to hear from you and think about together the question of how then one can do this, perhaps more generally, in order to teach it.

Let me give you the big question mark about the teaching of this. I mentioned that because judgement is context specific, every time you make a judgement, you have to decide, is this context the same or different from the context we had before. You know, that’s what it’s about, folks. You know, I mean, it is not following rules blindly.

And as I say to professionals, excuse me, one reason you are paid a great deal of money to be professionals is because you are supposed to exercise professional judgement and advise people about whether it is . . . how this does apply to you in this context. That’s what you’re supposed to be doing. But for teaching that, of course, is tough, because if you haven’t got nice model answers which say this is the answer to this question, and that’s really the end of the story, that’s not so easy.

What we’ve done is to ask the professionals who gave the ICAEW examples — we have about 20 of them — to say, what you did in these circumstances, or what you would have done, without an assumption that it has to be done in the same way in every case. But pedagogically, that seems to me an issue. So that’s number one.

Number two, often judgement issues are messy. You know, you may be looking at impairment, you may be looking at going concern, but actually you’ve got several other issues often involved in a particular judgement. So it’s not easy just to sort of put these into very, very clear discrete categories and teach from those. So that again, I think is an issue there. There’s the usual issues, you know, what level should this be pitched at?

Does it apply internationally? And so, and so on. But I’m going to stop there, if I may, because, I mean, I could go on for quite a long time, but I’m not going to, because I’m (a) particularly interested in any comments or suggestions that you’ve got in reaction to what I’ve said and (b) I’m very happy to answer any questions that you’ve got, because I skipped over most of the substance of this pretty hurriedly.

So if you’ve got particular questions you’d like to pose, I’m happy to answer them. But above all, I perhaps like to get into a discussion about okay, so if judgement is important, how does one actually teach this? Paul, can I go back to you?

Paul Jennings

Absolutely, yes. I thank you very much, Sir Andrew. I’m going to ask people to raise the little hand icon that you’ve got. If you want to come into the conversation, then I can see who wants to come in. Or feel free to ask questions in the chat as well. Just while we’re giving people time to, to think about that a little bit, one question I had for you, if I can maybe start off on this

I mean, I like the example you gave of going to the doctor and the doctor telling you what’s wrong rather than everything that isn’t wrong with you. And, I guess the tortured cry of the professor the world over is that students don’t answer the question.

They’re just absolutely determined to tell you everything they know and everything they’ve learned about it. And they’re intent on giving you a kind of diamonds in the cesspit experience. Whereas if they say one sensible thing in that 1,500 word answer, they will want the marks for it. And certainly what I think, and I’m speaking from a UK perspective now is the education system up to the age of 18 at least, possibly even beyond that now, seems to reward students for jumping through hoops, that there isn’t a particular reward for being adventurous and doing something different.

But there is a reward for doing what the examiners want you to do. And I wondered if that educational background that the professionals have gone through increasingly actually makes it more difficult. Is it harder to teach professional judgement when people are afraid of being wrong and haven’t got the experience of being wrong and making mistakes and recovering from?

Sir Andrew Likierman

Look, I can understand, you know, the concern about that. And I know perfectly well that the incentives are a great deal less if something isn’t examined. You know, and therefore one has to ask themself the question, all right, so if it’s not in the examinations, should we be bothering with this. So, you’ll be unsurprised to hear,

yes, I think we ought to be bothering about it, because if you’re going to be a professional, I think you ought to be learning about this, folks. So, the question, though, then, going back to the learning method, as it were, is this something if there isn’t an exact answer, I think it is tougher, frankly, to do this.

But I mean, perhaps, you may be surprised if you’ve come on this call, thinking about professional judgement, you know., well, so far we’ve treated professional judgement as a kind of residual. You know, at the end of it all, we’ve got the rules. We’ve got the principles. We’re down to the tough choice. Are we going to say it should be impaired or not impaired?

Are we going to say we should take the bad debt provision or not? You know, it’s a matter of judgement. Yeah. Okay. But my argument is, you know, this is actually something which is potentially more systematic than you might have thought. And therefore, in terms of the quality of the choices you make, my belief is you ought to think about the judgement process in going into it. Now, you know, I’m assuming here, I don’t know.

I’m not sure from those who are online what level everybody’s teaching. But I’m assuming that if it’s people not learning directly for a professional qualification, then this may seem a little bit remote. But, you know, I could also argue, well, you know, this is surely what gives the substance and the colour to a lot of accounting, as it does to any professional study, because simply learning the rules is one thing.

Applying them is more complicated, and that’s surely what is going to potentially get people interested and excited. So, you know, regardless of whether it’s examined or not, I would argue for that on those grounds.

Okay. Let me let me throw this open to the floor then. Anybody else want to come in on this please either just unmute yourself or if you want to raise the little yellow rubber glove. Or Paul, they can go in the chat if people want, prefer to get in the chat, I’m happy to — I’ve got the chat open.

Yeah. Or in the chat if you, if you’re in a room and you can’t speak out too loudly, then that please put any anyone else wants to come in on this. Anyone got anything to throw into the mix?

Anwar Halari

I just wanted to sort of touch on the personal qualities that you mentioned. As you mentioned that is one of the factors influencing professional judgement.

And since personal qualities can vary significantly between individuals. Yeah.

I mean, how do we then ensure the consistency in the application of professional judgement across the profession or the organisation? And how big of a role does that play in the judgement that one makes really because we know that, you know, personal qualities can be quite different.

Sir Andrew Likierman

Thank you for asking that. I didn’t go into what the personal qualities were.

But let me just give you some examples. There would be things like rationality, critical thinking, emotional intelligence, insight and self-awareness, intuition, perceptiveness, discernment. Now, these are things which one would expect anybody in any position of authority to have. But what we know is not everybody has all of these things. And so what needs to happen is, that if you haven’t got it, you need to have a member of your team or to bring somebody else in who has got it.

Because granted that accountants, generally speaking, work in teams in practice, and not everybody can have these . . . not everybody can have every personal quality. What one needs is a team which together provides the combination of personal qualities. So I mean, that’s just the reality of when people come to very difficult choices. You know, you haven’t got a list of things you’ve got to have.

All of us have got different things we bring. And that, of course, is why some firms are better than other firms, and some auditors are better than other auditors. Because they have different personal qualities.

What we need to do is to say, all right, what personal qualities am I bringing to this?

What am I not able to bring? I’m not very good at something or other. So how am I going to remedy that? By identifying personal qualities, you then enable somebody to say, how can I get better? Or how can I bring somebody else in who has got this? So hypothetically, let’s say, you know, we have somebody who is not very good at emotional intelligence.

You know what I mean? You need either to improve your own emotional intelligence or to bring somebody else who’s got it in. So you see what I mean? That would be my suggested approach.

I mean, I suppose the governance structures have a role to play as well to ensure that the teams are, you know, have the right amount of . . . Exactly . . . the broader thing, isn’t it?

Yeah. can I go onto on to chat? I’ve got an interesting section of things here. I’m missing the first round chat for some reason.

So the question before that, from Marie is, how can we teach professional judgement.

Well, when higher education is moving away from employing professionally qualified accountants? Okay, look, I mean, it’s not for me to say what or who should be teaching, I mean, all I’m saying is that if people are going to become professional accountants, and by that I mean not professional auditors, I mean professional accountants in organisations as well.

My belief is, that they need one of the things that gives them the quality that they should have is this. So when you say higher education’s moving away from it, I’m not arguing for or against what’s going on in higher education. I’m simply saying this seems to me something which is important anyway. Now you can say, well, I can’t, I haven’t got time to teach anything that isn’t on the syllabus, isn’t required and so on. That’s fine.

Well, in that case, I completely understand. But I’m saying I would be surprised if the people who are doing courses do not have to exercise professional judgement. And as I’m, you know, as I think I’m right in saying, that there isn’t any systematic existing teaching in this. And so you can see why I think there ought to be if they’re all going to have to use it.

And indeed, if they’re going to have to move from being technicians to something more than technicians, this is what is going to make the difference. So I think there’s a high element of self-interest in here for the people who are learning. Dan, you’ve said I’m near the end of my career. [Students] find it hard to demonstrate their judgement.

I tell them the final answer’s not crucial. It’s often the journey of how they got to their decision/conclusion that is key. I often suggest that when writing, think, what is the point? Why did you identify this point? So what? This could be the consequence. Well, I agree with you, see, because, I do think it’s really important.

And we know that regulators have now said it’s important. But you have to explain how you got to where you are. It’s no use just saying, well, we just got there. You know, we kind of had a good feeling this morning. We decided it was going to be a going concern and that’s fine. Isn’t quite good enough. So, I do think it’s the journey in that sense, you are right, is very important. Of course, at the end of it, there then has to be a view. You have to have an opinion. You’ve got to tell your client something as an accountant or as an auditor. So anyway, I’m agreeing, I think, with your general point there. When you say it’s to do, and you said something . . . if it’s you saying it’s to do with the individual student’s confidence or experience.

Okay. So look, students we know lack experience because and until they’ve gone through your excellent courses, they haven’t got that experience. And they then need to go and apply what you’re teaching. But in terms of confidence, I could argue, understanding what judgement is should help their confidence. You know, that should help them to say, oh my God, when I’ve faced with this really, really difficult issue, when do I believe management’s judgements?

Do I believe the estimates? Well, actually having an understanding of what judgement is about should help somebody in that. Ken, you asked the question to what extent should teaching on professional judgements include reference to ethics and ethical challenges. So when I describe my framework, I’ve said that the one of the elements was feelings and beliefs, and feelings and beliefs include good values and include ethical considerations.

In other words, my contention is that when somebody is exercising judgement, all these things act as a filter to what they know already in the application of what they know to a particular circumstance. So that includes ethical principles. So, ethics is part of the judgement process because it informs the values that then inform the choice. So I think it is part of it.

And it’s a kind of integral part of it. Tim asks in the same context, can there be two or more professional judgements? For example, in sustainability assurance, you can have a Big Four auditor judgement, which could be different . . . could be different to the judgement of a non auditor, sustainability consultant or assurer.

Yes, absolutely. I mean judgement can be different. People can come to different conclusions. I mean, you know, judgement is not an answer. Judgement is the bringing together of all the relevant knowledge and experience here in context in order to provide an answer. And people can provide different answers. Now, you know, if you’ve got two different opinions, you know, there has to be a decision either by the senior person there within the team or between different teams, as it were, if there’s somebody making arbitration, as to what the basis of the judgement is. But again, if you have a more systematic basis for judgement, it then enables you to unpick the alternatives and to say this looks better based than this, or in this particular case, we’ve relied on sources that don’t look as good as this particular source.

So even in choosing between alternatives, understanding that this is a process is a very good way to help do that. Cwaka, you say judgement is context specific, but are there any fixed or objective factors applicable across any and all situations that require professional judgement? Well, we do have rules. So, in that sense therefore that is an objective factor.

You know, we do have facts that can be ascertained. So those are objective factors. But when we’re dealing in judgement, we’re dealing with how we interpret the facts, how we interpret the rules. So I think yes, there are fixed and objective factors, but they are features of the judgement — they are not the end product. I mean, if something is a fact, then you’re not worried.

You don’t have to have a judgement. It’s a fact. You know, I mean, that’s it, folks. You know, am I taller than you? Well, we can look at the thing. We can stand side by side. And it’s a fact. We don’t have to worry about that. It’s only when it’s not completely clear whether I’m taller than you that we have to get into the judgement issue.

So I, you know, facts . . . I’m not saying facts are thrown out of the window or anything like that.

Because those of you who are doing research will know. I mean, this is a nightmare subject to research, an absolute nightmare subject. It’s very difficult to get published in this area because it straddles different disciplines. Journals are very, very worried about things that haven’t got evidence. You know, you say to it, if every judgement is context specific, how do you get a sample together, you know, and test it out?

It’s incredibly difficult to do. And I must tell you, I mentioned I talked to Danny Kahneman and when I told him about my methodology, he was pretty skeptical, I must tell you. He is a very conventional . . . he was a very conventional psychologist who believed, that, you know, you did things with samples and this was the way you did it.

But I said to him, look, I can’t do it with samples. I can’t, you know, this is not a subject you can do with samples anyway. So, next thing.

Paul Jennings

Can I bring in Reimi?

Reimi Sivalingam

Thanks, Paul.

Sir Andrew, I just want to ask a question around the definition of professional judgement.

So I’ve been an auditor for a long time before I became an academic. Yeah. As you know, it’s very common, the concept of professional judgement in practice. But it’s quite interesting. Your, this whole personal inequalities dimension, because I think if you look at the technical definition, it only focuses on knowledge, experience. Do you foresee any change to standards with the personal qualities being a bit more apparent, especially now that we’re moving more towards, you know, accounting being more about not just the technical skills but the moral and social domains as well?

Do you see any change in standards coming into play?

Sir Andrew Likierman

Well, Reimi, I had a go. I did talk to, you know, IFAC about the definition, when they were, I suppose a few, three or four years ago, when they were looking at the definitions of and various things, and I said, look, what is notably absent from the current definition is anything about people.

You know, it’s all about this rather abstract concept. Now, one of the . . . I mean, you notice that they have . . . there’s more in about bias specifically. They’ve mentioned eight biases. They’ve got something on bias in. So I might have been a little bit influential in some way in helping them push more in that direction. But any attempt I made to try and be more general about the role of the individual, I met with very, very, you know, very . . . they weren’t very keen on that at all.

And I think they all regarded it all terribly woolly and difficult. And, you know, how do we judge and how do we know? The thing is that I . . . my sense is I think they could do more on this without jeopardizing the integrity of the audit by recognizing the fact that people come as individuals to this, not as machines.

You know what I mean? Simply to assume that people slot into things. I mean, it seems to me unrealistic. And as long as it’s not recognised that there are people doing this, then I’m afraid we’re going to carry on having the kinds of issues we’ve got. But you see, I’m very cheered, obviously, by the fact that our local domestic regulator has done this.

I mean, the 2022 guidance includes things about people, you know what I mean? Which is very cheery and actually what I’ve heard from the FRC is that this is being looked at now by other countries as well, to see whether they should do it. I mean, just to be clear about one thing, by the way, I’ve talked to the FRC about the question because they produced something that I didn’t like.

I didn’t like it altogether. You know, it was generally fine, but I didn’t really like some of it anyway. But they have said that, look, as long as firms use a framework for judgement, they can use any framework. They have produced their own. Very graciously, they’ve said, well, actually this Likierman Framework looks kind of okay, so you can use that too, which I thought was very generous of them because they didn’t have to do that.

Also, what we know is that a lot of the firms have got their own frameworks and they’ve said, okay, if you’ve got your framework, it’s fine, use that. But as long as you’ve got something, you know. The irony is, by the way, for students of accounting history is that, KPMG produced what I thought was an excellent framework in the United States in 2011.

Now, I thought that was really very good. Interestingly, as we know, KPMG has got into a bit of trouble since 2011. So my assumption perhaps is they haven’t always read the framework as carefully as they should have done. So, anyway. But Reimi, did you also want to know about the question of culture?

Reimi Sivalingam

Yeah, because I think it’s funny you picked on KPMG, that’s where I came from.

And I do remember the 2011 framework. Right. Okay. Great. So how ironic is that? No, I think being an academic, it’s just looking at it from a different lens where I just feel when I read that definition, all it screams is the knowledge and experience. And I get that. But I think the crucial bit that’s missing is, as you say, the people aspect of it, the qualities that need to feed in.

And it’s also linking back to somebody else’s point around the ethical domain. I think that needs to be that stronger link for this to be more effective. But thanks anyway.

Sir Andrew Likierman

Absolutely. And also, I must tell you one thing, which is that, you know, I don’t claim to have a monopoly of wisdom on this subject. As far as I’m concerned, If somebody can produce a better framework, I think that’s great.

What I feel is important here is that we should recognize the fact that, you know, judgement is a process. I mean, there are many different ways and I’ve no doubt there will be other frameworks which will be great, you know. So please don’t hesitate if you want to produce one yourself. we’ve got a couple of questions in the chat.

Actually, two really interesting questions . . . from, I’m looking at the name now, R Narayanaswamy, in the chat, on culture. How much is culture a factor in forming judgment? Yes, that’s the one. Yeah. Okay. So, look, thank you very much for the question. That’s the one I wanted to get to next. So in my research, I have been all over the world, you know, and I’ve been to India more than once and talked to quite a lot of people in India about this and about the difference of the way in which business is done in India to the UK and so on.

And, what I’m very encouraged by is that nobody has said that the basic framework I’m suggesting is wrong. What they have said, it’s going to be applied in different ways in different countries. And that I can see absolutely.

This is very much, it seems to me, it’s also culturally specific because things will be different from one country to another.

Now, of course, if you’re an international firm and an international auditor, for example, then the local differences may matter a great deal less. But I do think that culture is going to be relevant. It’s going to affect the way in which judgement is applied. But I don’t think it either takes away from the importance of looking at judgement as a process or the basic structure of that process.

I should also say, by the way, just in terms of culture, in the last month, I’ve talked to a group from Japan and a group from China. All right. Where you might think there are issues here. And I’ve pressed them on the question of, look, would this apply in your country, or do you think actually some of the things wouldn’t apply?

And they have given me the same answer as I’ve given in relation to India, which is we think this framework would apply, though we would apply it differently. For example, in Japan, the example was we would take collective decisions. We would take them in a different way to the way they were taken in the West. That would be the kind of way in which they’d be different.

So I think that’s a great question.

So there’s another question, which is almost tacked onto the end of that, but I think it’s really interesting question, actually, which is how can the regulator or a judge avoid making a judgement with the benefit of hindsight? Well, look, you may or may not trust the regulator.

A lot of people don’t trust the regulator. All I can say is the regulator has said unambiguously, okay, that they will be not looking for the right or wrong outcome necessarily. They will be looking for the way in which the judgement has been made. So in that sense, they are saying we won’t simply say with the benefit of hindsight, we can see that’s what you should have done, you know, which is of course, everybody’s nightmare.

They have said they will look at process and that seems to me really very important. You know what I mean? And that’s on the record and I think that’s, you know, that’s taken seriously. So that’s great.

Okay, are there any questions that we’ve missed out from the chat that anyone wants to come back on, or does anybody else want to come in on the discussion? We’ve got a few minutes left before we . . . Can I can I just ask one question? All right. So, look, I mean, I’m conscious of the fact that you have a great deal of expertise on the question of teaching something like this or how you approach teaching this. Any suggestions or thoughts?

I’d be really interested to hear, because I also would like to see to be able to help if I could. But people who say, how do I teach this? You know what I mean? Any suggestions or thoughts would be very, very welcome.

I’m going to fill the silence then while I’m looking round for any for any hands.

And this is purely my own experience. Sure. I very much like using the case method in my teaching. I think it’s a great way of developing students’ judgements. The other thing I quite like about it is that as long as you make it very clear to the students that their marks are coming from a process they follow and the judgement they demonstrate, rather than guessing the right answer.

Yeah. Then students do engage with that. Where they tend to get a little bit nervy, I find, is if they think you’re trying to pull a fast one on them and lecture them all about the importance of judgement, but then give them marks for the right answer. Yeah, absolutely. So what I like about the case method is it’s really putting the student into the situation of the hero of the story and saying, how do you react in a situation of imperfect information?

You don’t know what happened next. What do you do now? And that gives them the chance to argue with each other about different approaches and different methods. So I very much like that. Anyone that hasn’t used the case method much, have a look at The Case Centre’s website. There’s all sorts of resources there, and tips for using the case method and short form cases that you can use.

Marie says here, suggests bringing accounting professionals into the classroom, which I think is, of course, also a great idea. So yes, for cases. As I said, the difficulty with cases is, you know, if there’s no absolutely right answer, as it were. So I think the case has to be about the approach.

How did you approach this? And one way perhaps to do it is to do through disasters. You know what I mean? I mean, if I may put, you know, add today’s news into this. If you look at the evidence of Paula Vennells in the case of the sub-postmasters, look no further for a failure for each of these six elements in terms of judgement. You know, what was known, who was trusted, all those things, it’s all there. And actually, it may be easier to teach things that have gone wrong and to say where the failures of judgement were, rather than what’s gone right. So there’s a thought. But putting professionals in, I think, is always a great idea.

Reimi, you ask about is it possible to access the framework? So I produced . . . I don’t know whether you can get into the Harvard Business Review back numbers easily. I produced the article in January/February 2020. There’s, for those who are ICAEW members, it’s now on the website as a CPD course.

So it’s all available there with lots and lots of examples and so on. So there’s two ways of doing it for anybody who wants to Dan, you suggested here on teaching, if I ask a student to give an answer verbally, I often ask why. And students then describe their rationale.

Yes, I agree with you. I mean, I think asking for a rationale in class would be a great idea. Yeah. And just to quickly answer Nor’s question, can I get a link for the cases? So Nor, I was talking about The Case Centre, which is really a repository for teaching cases. So if you look at, you’ll find links there, and you can register as an educator and see samples of cases without committing if you want to. But it’s a great place to find, to find good teaching cases.

Sir Andrew Likierman

Thanks, Paul. And Reimi has very kindly put on the link on chat to the article. Okay. This is of course, this is applied to leadership in, judgement in leadership.

So this is about people who run organizations. It’s not referring to professionals in general or auditors specifically, you know. But this provides the framework that I’ve been talking about. I’ve actually refined it, and I’m not plugging it, but a book is coming out in February next year.

Paul Jennings

So, please join me in a virtual round of applause for Sir Andrew. Sir Andrew, thank you very much for coming along today and leading such an engaging discussion. Thank you, thank you.

Sir Andrew Likierman

Anybody, any ideas? Always welcome.

Paul Jennings

And thank you again, everyone, for joining us. Please pop by Accounting Cafe and have a look at what else is on there. And we’ll hopefully see you next time.

Professor Sir Andrew Likierman has developed a framework to help professionals make better judgements and helped the FRC with their own 2022 Professional Judgement Guidance.  In this webinar, Andrew shared his framework and considered how it might be used in the classroom.

Resources and further reading

Likierman, A., (2020). The Elements of Good Judgment, How to improve your decision-making. Harvard Business Review, January–February 2020. Available at: Accessed 6 June 2024.

Online course: Applying Professional Judgment in Audit. ICAEW. Available at: Accessed 6 June 2024.

Sir Andrew Likierman

Andrew is a Professor of Management Practice at London Business School and was its Dean from 2009 to 2017. He has been the Head of the UK Government Financial Service, Chairman of the National Audit Office and Director of the Bank of England. He has published his research on judgement in management, leadership and the professions and his book on judgement at work is coming out in February 2025.  

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