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Find your inner sceptic

It’s not enough to be sceptical, you have to demonstrate it in practice. Simon Kettlewell offers some advice.

Being sceptical of information, explanations and documents presented to you (and therefore, exercising professional scepticism) is a key weapon in every auditor’s arsenal. The problem is that this cannot be taught. However, it is vital that on every single assignment, the auditor (be it the most senior or the most junior member of the team) identi8ies their “inner sceptic”, applies this to their client and ensures that it has been sufficiently documented.

So how is professional scepticism defined? ISA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing de8ines professional scepticism as “an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of audit evidence”.

The application notes of ISA 200 take this further, stating that professional scepticism includes being alert to:

  • audit evidence that contradicts other audit evidence obtained;
  • information that brings into question the reliability of documents and responses to enquiries to be used as audit evidence;
  • conditions that may indicate possible fraud; and
  • circumstances that suggest the need for audit procedures in addition to those required by the ISAs.

This is an extract from an article in the February 2016 edition of Audit & Beyond, the magazine of the Audit and Assurance Faculty.

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