Over a decade ago, professional judgment as applied to the determination of materiality was characterized as a black box (Bernstein [1967]). Since then a number of researchers have attempted to peer inside this black box. The objectives have been to determine how various factors affect materiality judgments and why highly trained professionals with extensive experience often reach different conclusions in similar situations. In a recent paper (Moriarity and Barron [1976]), we suggested a methodology which seems to hold promise as a means to open the black box. In this paper, we describe the next methodological step which we have taken and describe an application of the methodology. This paper may be viewed in terms of (1) the substantive questionmateriality; (2) the methodology-an application of conjoint analysis; (3) an application of judgment research; (4) a field study of audit partner judgments; and (5) a research technology having significant implications for future research on the substantive question. We believe that the primary contribution of the paper is point (5)-an illustration of a methodology having significant implications for accounting research. The field study itself provides two additional contributions: (1) it illustrates the application of the methodology to professional judgment in accounting, and (2) its findings are consistent with those of a large body of judgment research studies (e.g., Slovic and Lichtenstein [1971] and Libby

Several researchers (e.g., Boatsman and Robertson [1974], Dyer [1975], Frishkoff [1970], Pattillo [1975], Pattillo and Siebel [1974], and Woolsey [1973]) have attempted to explain how auditors make materiality judgments. However, these research efforts have not provided satisfactory explanations of the materiality judgment. In this paper, we (1) suggest a different view of the materiality concept, (2) suggest a methodology for examining how materiality decisions are reached, and (3) demonstrate the application of this approach to a specific materiality decision. Much of the research on materiality judgments is focused on discovering the amount of consistency which exists among professionals in making materiality judgments. The findings of this research have demonstrated that, in fact, no consensus exists in the profession. Bernstein [1967] summarizes much of the literature with the observation: [the decision function] seems to be . . . a highly personal device, since the output [decisions] can vary significantly on what are the same or similar sets of facts. Four possible sources of differences may exist among auditors' decision models which would explain the lack of consensus in materiality judgments. These are: (1) the variables deemed relevant to the decision; (2) the ma-

In a previous study reported here Moriarity and Barron [1976] used conjoint measurement to model the materiality judgment process of audit partners. They did so following the approach suggested by Krantz and Tversky [1971] in which axiomatic conjoint measurement (ACM) is used to identify the functional form of the decision maker's judgment model, and then numerical conjoint measurement (NCM) is applied to find the best-fitting scale values (part-worth functions).' Shortly thereafter, the American Accounting Association's Committee on Human Information Processing (AAA [1978]) suggested that conjoint measurement would be useful in the study of certain aspects of human information processing in accounting research, particularly for testing alternative composition rules which uses only ordinal properties of the data [1978, p. 32]. Composition rules refer to the functional forms (e.g., additive, multiplicative, etc.) of decision makers' judgment models.2 In a later paper, Moriarity and Barron [1979] examined the preaudit materiality judgments of audit partners, in which they assumed an additive model and used a holistic orthogonal parameter estimation procedure (Barron and Person, [1979]). Swieringa [1979] criticized this