ACCA recommendations to tackle cognitive bias in audit

The Association of Certified Chartered Accountants (ACCA) has recommended changes to standard –setting, regulatory and audit process to tackle cognitive bias and improve audit quality.

In a report entitled Banishing bias? Audit, objectivity and the value of professional scepticism, ACCA recommended that standard setters, regulators and auditors should take into consideration biases not only in the audit process but in the design of audit standards and regulations.

Andrew Gambier, head of audit at ACCA, said: “It is important that all these stakeholders, as well as auditors themselves, understand the extent to which cognitive bias affects the audit process and the ways in which it can be managed, but stakeholders should also recognise that bias cannot be eliminated entirely.”

‘The ‘human factor’ in the audit process is both essential and inescapable, he continued. “Even a machine-led audit may be subject to bias as a result of the information provided and the process of analysis.”

According to Gambier, ACCA’s recommendations provide first steps for all stakeholders to better understand the scope and limitations of professional scepticism in audit. He concluded: “I encourage these stakeholders to take multilateral action to ensure that audit standards, processes and regulation foster real increases in audit quality.”