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March 1, 2012

IAASB emphasises the need for professional scepticism

The International Auditing and Assurance Standards Board (IAASB) has released a new Q&A document to stress the importance of professional scepticism among auditors.

Professional Scepticism in an Audit of Financial Statement focuses on the requirements and application material in the International Standards on Auditing (ISAs) and the IAASB’s quality control standard relevant to the understanding and application of professional scepticism during an audit of financial statements.

“The IAASB’s ISAs explicitly recognise the fundamental importance of professional scepticism. Nevertheless, adopting and applying a sceptical mindset is ultimately a personal and professional responsibility to be embraced by every auditor. Audit firms themselves have an important role to play in cultivating a sceptical mindset in auditors, as do regulators, oversight bodies, and those charged with governance.” IAASB chairman Arnold Schilder said.

“The public expects high-quality audits. A sceptical attitude enhances the auditor’s ability to identify and respond to conditions that may indicate possible misstatement due to error or fraud and critically assess audit evidence,” IAASB technical director James Gunn added.

The IAASB’s paper also provides answers regarding what auditors can do to enhance awareness and effectively implement professional scepticism.

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