Audit and Assurance I Acct 318 Group 3
Audit and Assurance I Acct 318 Group 3
Audit and Assurance I Acct 318 Group 3
GROUP 3
TOPIC:
AUDIT QUALITY AND
PROFESSIONAL SKEPICISM
GROUP MEMBERS
1. DURU DAVID CHIDI 21/0987
2. AJAKAYE OLAYEMI ESTHER 21/2370
3. AZUKA GIFT ONYINYECHI 21/0304
4. NIHINOLA RERELOLUWA HONOUR 21/0798
5. AFOLABI OLUWANIFEMI OLUWATAMILORE 21/2755
6. AJAO OLUWAFERANMI DAVID 21/0286
7. HANDU IBRAHIM OLATUNBOSUN 212770
8. OGUNFOWORA OLUWATONI BOWOFOLUWA 21/1069
9. ANDE RIYINN MUSA 21/0027
10. OGUNWANDE OLUWABUKUNMI 21/0583
11. UMEKEJE CHINONSO STEPHANIE 21/1359
12. OLAJIDE PRECIOUS ANUOLUWAPO 21/0731
13. IBINE FRANCIS AYODELE 21/0694
14. OLARINOYE PRAISE INIOLUWA 21/0028
15. OLADAPO VICTOR IYANUOLUWA 210986
WHAT IS AUDIT QUALITY?
Audit quality refers to the standard of work performed by auditors in assessing and reporting on financial
statements. It encompasses factors such as the auditor's competence, independence, objectivity, due care,
and adherence to professional standards and regulations. High audit quality ensures that financial
statements provide reliable and transparent information to stakeholders, enhancing confidence in the
accuracy and integrity of the reported financial data. Audit quality refers to matters that contribute to the
likelihood that the auditor will:
● achieve the fundamental objective of obtaining reasonable assurance that the financial report as a
whole is free of material misstatement, and
● ensure material deficiencies detected are addressed or communicated through the audit report.
This includes appropriately challenging key accounting estimates and treatments that can materially affect
the reported financial position and results.
This view is consistent with the objective of the audit (see paragraph 11 of Auditing Standard ASA 200
Overall objectives of the independent auditor and the conduct of an audit in accordance with Australian
auditing standards).
2. Reporting Audit Quality: This type of audit quality focuses on the accuracy and completeness of
the audit report, ensuring that it provides a fair representation of the entity’s financial position and
performance. It describes how the audit firm’s leadership, through its tone at the top, emphasizes
audit quality and holds itself accountable for the audit firm’s system of quality control and to the
public interest by devoting sufficient and appropriate resources.
3. Procedural Audit Quality: This type of audit quality refers to the effectiveness and efficiency of
the audit procedures used by the auditor, ensuring that the audit is conducted in a thorough and
systematic manner. These are steps performed by auditors to get all the information regarding the
quality of the financials provided by the company, which enable them to form an opinion on
financial statements whether they reflect the true and fair view of the organization’s financial
position.
4. Independence Audit Quality: This type of audit quality ensures that the auditor remains
independent and unbiased throughout the audit process, avoiding conflicts of interest and
maintaining objectivity. Audit quality greatly depends on auditor independence and has been
defined as the probability that the auditor will uncover and report any breach in the accounting
system.
5. Competence Audit Quality: This type of audit quality focuses on the knowledge, skills, and
experience of the auditor, ensuring that the audit is performed by qualified professionals capable
of fulfilling their responsibilities effectively. The more competent auditors are the higher the
quality of audits they provide. This shows a positive relationship between competence and audit
quality conducted by the auditor.
6. Ethical Audit Quality: This type of audit quality focuses on the ethical behaviour and integrity of
the auditor, ensuring that they adhere to ethical standards and conduct themselves with honesty
and integrity throughout the audit process. Auditor can promote their audit quality by adopting
and applying the ethical requirements embodied in objectivity, prudence, confidentiality,
independence, competence, and integrity
Another aim of audit quality is to provide reasonable assurance that the financial statements are free from
material misstatements. This means that the auditors carefully examine and assess the financial records,
transactions, and internal controls of a company to determine if they are presented fairly and accurately.
Audit quality aims to build trust and confidence in the financial reporting process. When stakeholders,
such as investors, lenders, and regulators, have confidence in the accuracy and reliability of the financial
statements, they can make informed decisions based on that information.
Another objective is to enhance audit quality. Regulatory bodies, professional organizations, and auditing
firms continuously work together to establish and enforce auditing standards, provide training and
education, and conduct quality control reviews.
The main aim of audit quality is to provide assurance to stakeholders that the financial statements are a
true and fair representation of the company's financial position, performance, and cash flows. It plays a
crucial role in maintaining the integrity and transparency of the financial reporting process.
7. High audit quality is essential for protecting investors by ensuring that financial statements are
accurate and free from fraud. This is crucial for maintaining the integrity of capital markets.
Auditors play a key role in verifying financial information, detecting fraud, ensuring compliance
with regulations, disclosing risks, and maintaining independence. Timely and transparent audits
enhance investor confidence and help them make informed decisions.
8.Audits are essential for effective corporate governance, ensuring that management acts in the best
interests of shareholders. The board of directors plays a key role in overseeing financial reporting and the
external audit process. An independent audit committee can enhance audit quality by selecting qualified
auditors and facilitating communication between auditors and the board. Strong internal controls are
crucial for reliable financial reporting, while a culture of integrity and ethical behaviour promotes audit
quality. Auditor independence is maintained through mechanisms like audit firm rotation and oversight by
the audit committee or board.
2.Risk management: Risk in auditing refers to the auditor's level of Skepticism regarding the reliability of
the evidence, the efficiency of the client's internal control system, and the veracity of the financial
statements fair presentation when the Audit is finished by the planned procedures and with the required
professional standards.
3.Appropriate training: Up-skilling your people enhances the overall quality of the services performed by
the audit profession, reduces risk of non-compliance and material misstatement within not only your audit
practice but within the audit profession as a whole.
4.Performance evaluation: This is an important audit quality drive because it is a formal and productive
procedure to measure an employee's work and results based on their job responsibilities.
After the input audit drivers have been worked on, the output audit quality drivers are next to ensure that
audit quality is achieved.
2.Job satisfaction for audit staff: Job satisfaction among employees plays a vital role in an organization
because they will help to ensure optimum productivity of an organization. It is important for auditors to
be satisfied with their jobs so as to prevent material misstatement and promote good audit skills.
3.Well informed management and audit committee: An audit committee is a sub-group of a company's
board of directors responsible for the oversight of the financial reporting and disclosure process. To be
successful, the audit committee should be aware of the processes and internal controls in the organization.
QUALITY CONTROL
In auditing, quality control is the process of ensuring all the quality protocols of professional standards
have been followed while performing auditing. The process is based on objectivity. All the results
provided by this review are unbiased and based on facts. The firm gets sure that it has complied with all
the quality parameters throughout an audit. The overall goal of this review is to check whether the firm
complies with professional and organizational standards of quality control or not. This process enables the
auditor to issue a clean audit report.
The audit team must discharge professional responsibilities with independence. The team shouldn’t only
be independent but appear to be independent of the audit client. Integrity refers to performing tasks with
personal honesty. Although, it’s a personal trait. However, it can be nourished to ensure the adequacy of
an audit. Objectivity means that the task should be performed on facts neglecting personal intuitions and
biases. So, compliance with this policy can effectively ensure quality. This element of quality control
review deals with different factors that the audit team must ensure.
Personnel Management:
Personnel management is an important aspect of designing quality control policies and procedures. This
factor contains the nature of supervision that should be provided to personnel. It should be effective and
drive the personnel to perform their responsibilities at their best. Other than nature, the extent of
supervision should also be taken care of. Too much extra supervision might generate negative outcomes,
so as much-avoided supervision. Personnel management also involves practices such as hiring, assigning
of tasks, professional development, etc.
Client acceptance is another important aspect of quality control. An audit firm needs to ensure they are
independent of the client. Further, they have sufficient resources to assure on the risk brought by a new
audit client. For instance, insurance companies, financing companies, and banks carry higher audit risks.
So, the firms need to assess if they have sufficient resources, time, and competence to ensure they would
be able to cover the risk. Generally, audit firms assess internal risk assessments with internally designed
forms. This helps them ensure risk is appropriately assessed before client acceptance. Usually, senior
managers are assigned to assess risk as it’s a strategic matter. Likewise, policies should also be designed
to assess whether a relationship with a client should be continued. Lastly, it explains the performance of
an engagement with a client.
4-.Engagement Performance:
The engagement personnel needs to comply firm’s quality protocols and overall professional standards.
Policies and procedures should be designed to enhance these policies. As the name of the element
suggests, engagement performance is a broader concept and covers all the phases from planning to
execution of the engagement. The control policies are developed by keeping in mind the applicable
professional standards. Usually, these policies involve supervision, communication, planning, and other
stuff related to engagement execution.
5.Monitoring:
Monitoring is one of the crucial elements while establishing procedures for quality control. It aims to
ensure appropriateness, effectiveness, and compliance of the audit processes and achievement of
objectives. Effectiveness is equally important to assure that there is no wasted resources and results are
optimized. Further, continuous professional development activities should also be monitored to evaluate
whether processes are effective or not. The above-discussed elements make the policies and procedures of
quality protocols more effective. A firm’s audit department can reach new heights by ensuring that its
policies have these elements. All the loopholes of auditing practices can be limited by implementing
policies with these elements.
Key Performance Indicators (KPIs) for Audit Quality: They are indicators which are used to evaluate the
quality of audit work and adherence to professional standards. Examples: Audit findings accuracy,
adherence to audit methodology, compliance with regulations.
a. Definition: Compliance with regulations refers to an organization’s adherence to laws, rules, and
legal requirements relevant to its business operations.
b. Importance:
c. Legal Boundaries: Compliance ensures that organizations operate within legal boundaries and
follow prescribed protocols.
d. Risk Mitigation: Proper compliance minimizes the risk of legal violations, penalties, and
reputational damage.
e. Stakeholder Trust: Complying with regulations enhances stakeholder trust and confidence.
12) Adherence to Audit Methodology
a. Definition: Adherence to audit methodology refers to how closely auditors follow established
guidelines, procedures, and best practices during the audit process.
b. Importance:
a. Consistency: Following a standardized methodology ensures consistent audit execution
across different engagements.
b. Quality Assurance: Adherence to methodology enhances the quality and reliability of
audit work.
c. Risk Management: Proper methodology minimizes the risk of overlooking critical audit
steps..
These KPIs collectively contribute to audit quality by emphasizing accuracy, efficiency, adherence to
standards, and stakeholder satisfaction. Auditors should continuously monitor and improve their
performance based on these indicators. Remember that audit quality is a collaborative effort involving the
entire audit team and the organization’s commitment to transparency and reliability.
Timing of audit execution: This refers to the efficiency and effectiveness of completing audit
procedures within the planned timeline. Timely execution ensures that audit procedures are
conducted when they are most effective and helps prevent delays in reporting.
Use of specialists: Specialists are experts in particular fields (e.g., tax, valuation, IT) whose
knowledge and skills are utilized during the audit to address complex or specialized areas. Their
involvement enhances the quality of audit procedures and ensures accurate evaluation of financial
statement components.
Experience of engagement team: Audit quality also improves as auditors gain experience in
conducting audits. First-year auditors are not expected to know as much about the audit process
as the audit partner who has been performing audit engagements for many years.
Management deliverables: These are the documents and information provided by management to
the audit team. Completeness, accuracy, and timeliness of these deliverables are crucial for
conducting a comprehensive and reliable audit.
Audit hours by areas of significant risk: Allocating audit hours based on the level of risk in
different areas helps prioritize efforts where the risk of material misstatement is highest.
Adequate time spent on high-risk areas ensures thorough examination and enhances the reliability
of audit findings.
A better understanding among management, the audit committee and the external auditor of their
respective roles in the audit and responsibilities related to audit quality, and their expectations of
others.
More efficient and effective interactions between the audit committee and the auditor, as
discussions are focused on the most important areas of the audit.
Improved knowledge and engagement in the audit process and audit quality by all members of the
audit committee due to increased information on the most important areas of the audit.
Improved project management over the audit, including coordination and collaboration in audit
execution.
Better information for the purposes of auditor evaluation.
It is essential to recognize that measuring audit quality remains challenging because of the complexity of
the subject matter and the potential limitations of available data sources. The International Auditing and
Assurance Standards Board (IAASB) has developed an international framework called "Audit Quality
Indicators" (AQI). This framework aims to help regulators, standard setters, audit firms, and other
interested parties identify and understand key aspects related to audit quality.
2. Competence and capability: Encouraging continuous professional development among staff members
and ensuring adequate resources are allocated to deliver high-quality services.
3. Quality control: Implementing robust internal controls over the audit process, including monitoring and
review mechanisms.
4. Professional skepticism: Promoting a culture where professionals critically evaluate evidence and
challenge assumptions during their work. These components serve as foundational elements for
evaluating audit quality. However, it should be noted that there isn't one single metric or indicator that can
accurately capture all facets of audit quality. Instead, a combination of different measures is typically
used to gain a more comprehensive understanding of audit quality.
Additionally, research suggests that certain characteristics of audit engagements might influence audit
quality. For instance, larger audit teams, higher levels of client involvement, and greater use of
technology have been associated with better audit outcomes. Furthermore, the presence of multiple
partners working on an engagement has also shown to positively impact audit quality. Measuring audit
quality requires considering a variety of factors, both qualitative and quantitative. While no perfect
solution exists, the AQI framework provides valuable guidance for those seeking to improve audit quality
assessment practices. It emphasizes the importance of fostering independence, promoting competency,
implementing strong quality controls, and encouraging professional skepticism throughout the entire audit
process
1.Define clear objectives and develop an audit plan that includes the audit scope, criteria, team, schedule,
methods, and resources. The audit plan should be reviewed and approved by the appropriate authorities
and communicated to all relevant stakeholders
2.To conduct a thorough document review and use a risk-based approach to identify areas that need to be
audited
3. To execute the audit by collecting information from the processes, departments, or products examined
and interviewing employees who are closely related to the quality management processes
4.To report and follow up on the audit results by preparing an audit report that summarizes the audit
objectives, scope, criteria, team, activities, findings, conclusions, and recommendations
The audit report should be reviewed and approved by the appropriate authorities and distributed to the
relevant stakeholders
In essence, corrective actions or improvement actions should be agreed upon by the auditee and
monitored and verified for implementation and effectiveness It is also important to maintain
independence, objectivity, and impartiality throughout the audit process
2. Stay updated with auditing standards and regulations: Auditors should be aware of the latest guidelines
and regulations issued by relevant authorities. For instance, they can regularly review updates from
professional accounting bodies and regulatory agencies.
3. Conduct thorough risk assessments: Auditors should identify and assess the risks that could impact the
financial statements. They can analyze industry trends, internal control weaknesses, and economic factors
to determine the areas of highest risk.
4. Perform robust audit procedures: Auditors should design and execute audit procedures that provide
sufficient evidence to support their conclusions. This can involve testing the accuracy and completeness
of transactions, verifying account balances, and confirming the existence of assets.
5. Foster a culture of integrity and ethical behavior: Auditors should promote ethical conduct within their
organizations and maintain independence from clients. For example, they can establish policies that
prohibit conflicts of interest and encourage open communication about ethical dilemmas.
6. Invest in ongoing training and development for auditors: Auditors should continuously enhance their
knowledge and skills through training programs and professional certifications. This ensures they are
equipped to handle complex accounting issues and emerging risks.
7. Implement quality control measures to monitor and enhance audit processes: Auditing firms can
establish internal quality control systems to review and assess the effectiveness of their audit
engagements. This can involve conducting internal inspections, peer reviews, and implementing feedback
mechanisms.
PROFESSIONAL SKEPTICISM
Professional skepticism is an essential mindset and skill for auditors and other professionals involved in
evaluating information or making judgments. It involves maintaining a questioning attitude, being alert to
potential biases or misstatements, and critically assessing the evidence obtained during an audit or
investigation. Professional skepticism requires auditors to approach their work with a healthy degree of
doubt, challenging assumptions and seeking corroborating evidence to support conclusions.
It helps ensure that auditors remain vigilant and thorough in their examination of financial information,
reducing the risk of overlooking errors or fraudulent activities. Exercising professional skepticism is a
critical part of conducting quality audits. The auditor must critically assess, with a questioning mind, the
validity of the audit evidence obtained and management’s judgements on accounting estimates and
treatments.
Auditors should not:
● be over-reliant on, or readily accept, the explanations and representations of the management of
audited entities without challenging matters such as key underlying assumptions, or
● seek out evidence to corroborate estimates or treatments rather than appropriately challenging the
1.Questioning Mind: Many studies in accounting equate this notion with such terms as suspicion,
disbelief, doubt, all of which have some aspects of questioning
2.Suspension of Judgement: Withholding judgment until there is an appropriate level of evidence for
conclusions is being recognised as a second important characteristic of a professional skepticism.
3.Search for Knowledge: Searching for knowledge is another trait-dependent characteristic which is
directly connected with the former one. Suspending judgment implies searching for knowledge through
collecting evidence in order to achieve deeper understanding of things. It differs from questioning mind as
this term contains some sense of doubt or disbelief. Skeptics are truly interested in broadening their
knowledge in general and they are not interested in searching for simple answers while verifying
conclusions.
5.Autonomy: This is being indicated in all well recognized auditing standards as a foundation of an
auditor profession. For example, ISA 200 states that “The auditor shall comply with relevant ethical
requirements, including those pertaining to independence, relating to financial statement audit
engagements” supporting the attribute of autonomy while performing auditing procedures.
Other auditing standards, as AU 230.08 and ISA 700.33 indicate that the auditor should remain
autonomous evaluating evidence and making decision whether collected evidence is sufficient to
render a judgment [IAASB 2010b]. Auditing researchers also underline the autonomy as an
essential attribute of an auditor.
6.Sufficient level of Self –Esteem: This enables the auditor to resist persuasion and challenge opinions of
the others. In fact, self-esteem is necessary factor allowing an auditor to remain autonomous while
performing auditing procedures. This often requires face-to-face interactions with evidence providers and
skeptics should be able to explicitly identify and acknowledge
ATTRIBUTES OF PROFESSIONAL SKEPTICISM
1. Independence: Skeptical auditors maintain independence from the parties they are auditing, ensuring
they can assess audit evidence objectively and without bias.
2. Ethical Conduct: They adhere to high ethical standards and maintain integrity in their audit work, even
when faced with difficult audit decisions.
3. Continuous Improvement: Auditors with skepticism are always looking for ways to improve their audit
processes and methodologies, which helps them stay ahead of emerging risks and challenges.
4. Communication Skills: They are effective communicators, able to articulate their audit findings and
recommendations clearly and persuasively to stakeholders.
5. Awareness of Bias: They are aware of their own biases and work to mitigate them, ensuring that their
audit judgments are based on audit evidence and not influenced by personal beliefs or preferences.
6. Adaptability: They are adaptable and able to adjust their audit approach based on new audit evidence or
changing audit circumstances.
7.Resilience: They are resilient in the face of audit challenges and setbacks, maintaining a positive
attitude and a commitment to excellence in their audit work.
When assessing engagement acceptance – at this stage the auditor should consider
whether the management of the intended audit client acts with integrity and whether there are
any matters that may impact on the auditor being able to act with professional skepticism if they
accept the engagement, such as ethical threats to objectivity.
When performing risk assessment procedures – an auditor should be skeptical when
performing risk assessment procedures at the planning stage of the audit. For example, when
discussing the results of analytical procedures with management, the auditor should not accept
management’s explanations at face value, and should obtain corroboratory evidence for the
explanations offered.
When obtaining audit evidence – the auditor should be ready to challenge management,
especially on complex and subjective matters and matters that have required a degree of
judgement to be exercised by management. The reliability and sufficiency of evidence should be
considered, especially where there are risks of fraud. There may also be specific issues arising
during an audit which impacts on professional skepticism – for example, if management refuses
the auditor’s request to obtain evidence from a third party. The auditor will have to consider how
much trust can be placed on evidence obtained from management – for example, evidence in the
form of enquiry with management or written representations obtained from management. ISA
200 states that ‘a belief that management and those charged with governance are honest and have
integrity does not relieve the auditor of the need to maintain professional skepticism or allow the
auditor to be satisfied with less than persuasive audit evidence when obtaining reasonable
assurance’.
When evaluating evidence – the auditor should critically assess audit evidence and be
alert for contradictory evidence that may undermine the sufficiency and appropriateness of
evidence obtained.
The auditor should also apply professional scepticism when forming the auditor’s opinion, by
considering the overall sufficiency of evidence to support the audit opinion, and by evaluating
whether the financial statements overall are a fair presentation of underlying transactions and
events.
Ultimately, the application of professional scepticism should reduce detection risk because it
enhances the effectiveness of applied audit procedures and reduces the possibility that the auditor
will reach an inappropriate conclusion when evaluating the results of audit procedures.
In order to achieve the overall audit objective which is to obtain assurance that financial statements are
free from material misstatements, ISA 200 requires that the auditor needs to plan and perform the audit
with professional skepticism and apply professional judgement, recognizing that circumstances may exist
that cause the financial statements to be materially misstated. The professional standards define
professional skepticism as “an attitude that includes a questioning mind, being alert to conditions that
may indicate possible misstatement due to fraud or error, and a critical assessment of audit evidence.
Skepticism involves the validation of information through probing questions, the critical assessment of
evidence, and attention to inconsistencies.
The three elements of professional skepticism are:
1. Auditor’s attributes
2. Auditor’s actions
3. Auditor’s mindset
They permeate the entire audit process and are integral to audit quality.
1. Attributes (knowledge, skills and abilities) –the audit is to be performed by a person or persons
having adequate technical training and proficiency as an auditor. Auditors should be assigned to tasks and
supervised commensurate with their level of knowledge, skills, and abilities so that they can evaluate the
audit evidence they are examining.
2. Mindset (an attitude) –the auditor neither assumes that management is dishonest nor assumes
unquestioned honesty. In exercising professional skepticism, the auditor should not be satisfied with less
than persuasive evidence because of a belief that management is honest. The auditor should conduct the
engagement with a mindset that recognizes the possibility that a material misstatement due to fraud could
be present, regardless of any past experience with the entity and regardless of the auditor’s belief about
management’s honesty and integrity.
3.Actions (a critical assessment)–gathering and objectively evaluating audit evidence requires the auditor
to consider the competency and sufficiency of the evidence. Since evidence is gathered and evaluated
throughout the audit, professional skepticism should be exercised throughout the audit process.
3. Objectivity and Independence: Professional skepticism emphasizes the need for auditors to
maintain objectivity and independence in their judgments and decisions.
4. Risk Assessment: Auditors are required to assess the risk of material misstatement due to fraud or
error, which requires a skeptical mindset to identify and address potential risks.
5. Evidence Evaluation: Auditors should critically evaluate the sufficiency and appropriateness of
audit evidence, considering its source, reliability, and relevance.
7. Documentation: Auditors should document their professional skepticism, including any concerns
raised and how they were addressed, to demonstrate compliance with auditing standards.
8. Challenges and Mitigation Strategies: The concept acknowledges the challenges auditors face in
maintaining professional skepticism and suggests strategies to overcome these challenges.
2. Overconfidence: Professionals might become overly confident in their own judgments and abilities,
leading to a lack of questioning or challenging assumptions. This overconfidence can blind individuals to
potential errors or alternative perspectives.
3. Cognitive Dissonance: When faced with conflicting information, professionals may experience
cognitive dissonance, which is the discomfort arising from holding contradictory beliefs. This discomfort
can discourage individuals from critically examining evidence that contradicts their established views.
4. Pressure to Conform: In group settings, there may be pressure to conform to the majority opinion or
organizational culture. This conformity bias can suppress dissenting voices and hinder the expression of
skepticism, especially when challenging prevailing norms or accepted practices.
5. Time Constraints: Professionals often face time constraints, especially in fast-paced environments. This
pressure can compromise the thoroughness of their analysis and encourage shortcuts, reducing the time
available for critical questioning and skepticism.
6. Fear of Retaliation: Expressing skepticism might lead to negative consequences, such as being
ostracized, facing professional backlash, or even job loss. Fear of retaliation can deter individuals from
openly questioning decisions, procedures, or information.
7. Lack of Training: In some cases, professionals may not receive adequate training in critical thinking
and skepticism. A lack of skills or awareness regarding how to apply skepticism in their field can be a
significant barrier.
Professional skepticism is a critical mindset that helps professionals in various fields, such as accounting,
auditing, and consulting, to maintain objectivity and question information or assumptions. Here are some
benefits of professional skepticism:
1. Enhanced Decision-Making:
Professional skepticism helps professionals make more informed decisions by questioning assumptions,
challenging biases, and considering alternative perspectives. This can lead to better outcomes and reduced
risks.
2. Increased Reliability: By maintaining a skeptical mindset, professionals are more likely to identify
errors, inconsistencies, or potential fraud, leading to more reliable information and reports.
3. Improved Quality of Work: Professionals who are skeptical are more likely to conduct thorough
investigations, perform detailed analyses, and verify information, which can lead to higher-quality work
products.
4. Risk Management: Professional skepticism helps identify potential risks and vulnerabilities, enabling
professionals to take proactive measures to mitigate these risks and protect their organizations.
6. Client Trust: Clients are more likely to trust professionals who demonstrate professional skepticism, as
it shows that the professionals are diligent, thorough, and committed to providing accurate and reliable
information.
Overall, professional skepticism is a valuable mindset that can lead to better decision-making, increased
reliability, improved quality of work, effective risk management, ethical conduct, client trust, and
continuous improvement.
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https://www.aicpa.org/content/dam/aicpa/interestareas/frc/assuranceadvisoryservices/
downloadabledocuments/auditdataanalytics/audit-data-analytics-professional-skepticism.pdf
PCAOB. (2012). Auditing standard no. 10: Supervision of the audit engagement. Retrieved from
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AICPA (2012). AU-C Section 200: Overall Objectives of the Independent Auditor and the Conduct
of an Audit in Accordance With Generally Accepted Auditing Standards. Retrieved from
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