Demonstrating Professional Skepticism

Demonstrating professional skepticism while conducting an audit is an important, well-documented expectation of the profession. A skeptical mindset ensures that auditors approach audits recognizing that it is always possible that fraud is present. Unfortunately, recent audit deficiencies and failure...

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Bibliographic Details
Published inThe CPA journal (1975) Vol. 85; no. 3; p. 31
Main Authors Boyle, Douglas M, Carpenter, Brian W
Format Journal Article
LanguageEnglish
Published New York New York State Society of Certified Public Accountants 01.03.2015
Subjects
Accounting
Audit engagements
Audit quality
Audit risk
Auditing standards
Auditors
CPAs
Fraud
Planning
Professional responsibilities
Public companies
Sanctions
Skepticism
United States > US
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Summary:Demonstrating professional skepticism while conducting an audit is an important, well-documented expectation of the profession. A skeptical mindset ensures that auditors approach audits recognizing that it is always possible that fraud is present. Unfortunately, recent audit deficiencies and failures have raised questions as to whether auditors exhibit an appropriate degree of skepticism. This article reviews the profession's guidance regarding professional skepticism, summarizes the results of studies examining audit deficiencies and failures attributed to a lack of sufficient professional skepticism, and offers suggestions to aid auditors in exhibiting appropriate levels of professional skepticism in audit engagements. It is important for audit firms to assess the personal attributes of the personnel assigned to the engagement team so it has individuals with the necessary traits and experience to make skeptical judgments. Similarly, it is important for the firm to specifically include mechanisms for monitoring the exhibition and documentation of professional skepticism.
ISSN:0732-8435