PurposeThis study examines the mediating effect of effort on the relationship between performance incentives and audit judgment performance under different levels of task complexity.Design/methodology/approachUsing an experimental research design, subjects are randomly assigned to three performance incentive groups: control, financial and feedback. Each subject is required to perform two experimental tasks of two complexity levels (low and high).FindingsResults indicate that performance incentive variables are positively related to audit judgment performance. Hierarchical regressions of moderated‐mediation analyses support the hypotheses that the mediation effect of effort on the relationship between performance incentives and audit judgment performance occurs under low task complexity and not under high task complexity. In other words, the positive relationship between effort and audit judgment performance is weakened under high task complexity.Research limitations/implicationsThe external validity of this study is limited since the audit case contains less information than the real audit environment. This study contends that the expectancy theory can in fact be used to generate empirical prediction on audit judgment performance. The reliance on expectancy theory to supply theoretical mechanism by including the moderating variables provides explanation on when effort should and should not have positive effects on audit judgment performance.Practical implicationsAudit firms need to be careful on the performance incentives offered because incentives affect job output quality. Performance incentives may reduce job turnover and job tension among auditors. In addition, audit firms should ensure that the auditors have proper training to increase their skills and knowledge to help auditors to carry out various job complexities.Originality/valueThis paper can enhance knowledge and understanding on how motivational and environment factors influence audit judgment performance.

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