Professional Scepticism

Professional Scepticism


"An attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to fraud or error, and a critical assessment of audit evidence." (ISA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing).


Auditors are required to perform audits with an attitude of professional scepticism. There has been much criticism recently that auditors are failing in this requirement and there are plans to try and improve scepticism within the profession.

Practically auditors need to remain alert to the risk of misstatement, regardless of the perceived strength of the client's controls or the results of previous audit procedures (either in the current or prior years). A good example is fraud: no matter how strong a client's controls, fraud is always possible.

Another implication of scepticism is to consider the nature of identified misstatements. There has been a tendency in the past to immediately identify a misstatement as an error (i.e. accidental). Auditors should consider misstatements more deeply; they could be due to fraud, or at least indicative of deficiencies in the accounting system that could lead to further errors or frauds.

Created at 10/3/2012 2:37 PM  by System Account  (GMT) Greenwich Mean Time : Dublin, Edinburgh, Lisbon, London
Last modified at 11/2/2016 10:55 AM  by System Account  (GMT) Greenwich Mean Time : Dublin, Edinburgh, Lisbon, London

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