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December 5, 2012

PCAOB Publishes Staff Audit Practice Alert

The Public Company Accounting Oversight Board (PCAOB) has published its tenth staff audit practise alert, entitled "Maintaining and Applying Professional Skepticism in Audits". The alert reminds auditors of their requirement to exercise professional scepticism throughout their audits.

PCAOB standards define professional scepticism as "an attitude that includes a questioning mind and a critical assessment of audit evidence", qualities which the PCAOB says it continues to observe being inadequately displayed by auditors.

The timing of the alert was intended to assist audit firms in the upcoming calendar year-end focus on the importance of professional scepticism. The PCAOB is exploring the possibility of additional actions that might meaningfully enhance auditor’s professional scepticism.

James R. Doty, PCAOB chairman said "Investors depend on independent audits to provide a meaningful check on the financial statements prepared by company management.

"Without professional scepticism, the audit cannot serve that essential function."

Related linkPublic Company Accounting Oversight Board

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