Page 105 - AAA Integrated Workbook STUDENT S18-J19
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Planning, materiality and assessing the risk of material misstatement
Professional scepticism
6.1 Definition
Professional scepticism: 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.
6.2 Evaluating whether professional scepticism has been applied
Examples of circumstances where professional scepticism has not been applied
include:
Contradictory evidence has not been questioned.
The reliability of documents and responses to enquiries from the client has not
been evaluated.
The sufficiency and appropriateness of evidence has not been considered.
The authenticity of a document has not been considered, when there are
indications of possible fraud.
Past experience of the dishonesty or lack of integrity of the client has been
disregarded.
The auditor has accepted less persuasive evidence because of their past
experience of the honesty and integrity of the client.
Professional scepticism is both an ethical and a professional issue. Professional
scepticism links with the fundamental principles of integrity, objectivity and
professional competence and due care.
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