Professional scepticism (and independence) is at the heart of the audit and an essential part of audit quality. Auditing standards define professional scepticism and require its application in many audit phases.
ASIC’s financial-reporting and auditor-surveillance programs, corporate restatements, and negligence claims reveal examples where scepticism has apparently been lacking. ASIC continues to remind auditors of its importance and the need for professional scepticism to be documented.
This session will:
- Review the requirements of auditing and ethical standards for the exercise of professional scepticism
- Application of professional scepticism requirements in specific areas e.g., appropriate risk assessment, estimates (including impairment), and automation bias
- Report on the latest developments in the practical application of professional scepticism
- Identify how scepticism should be documented in the audit file
- Discuss what makes a good environment for auditor scepticism and challenge, and
- Describe what should be in your scepticism audit policy.
