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Professional Skepticism Working Group releases first report

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Following a 24-month initiative, three international standard-setting boards for auditing, accounting ethics and accounting education released its report Toward Enhanced Professional Skepticism in the hopes of making accountants and auditors more skeptical of management assertions.

The Professional Skepticism Working Group, with representatives from the International Auditing and Assurance Standards Board (IAASB), the International Ethics Standards Board for Accountants (IESBA) and the International Accounting Education Standards Board (IAESB), was convened in 2015 to formulate views on whether and how each of the three boards’ sets of international standards could further contribute to strengthening the understanding and application of the concept of professional skepticism as it applies to an audit.

The publication includes observations about the current environment for accountants and auditors, and describes the actions the boards plan to take, along with how other constituents can improve professional skepticism. According to the IAASB, the importance of professional skepticism is underscored by the increasing complexity of business and financial reporting, including the greater use of estimates and management judgment, business model changes due to technological developments, and the fundamental reliance of the public on dependable financial reporting. It lies at the heart of a quality audit.

“When this initiative began, the boards were looking for input on whether and how each of their standards could contribute to strengthening the understanding and application of professional skepticism as it applies to an audit,” said Annette Köhler, a professor who chaired the Professional Skepticism Working Group, in a statement.

“We have shared our observations and recommendations with the boards, and professional skepticism now features prominently in each of the boards’ strategic considerations.”

Read the full report at: http://www.ifac.org/publications-resources/toward-enhanced-professional-skepticism?utm_source=IFAC+Main+List&utm_campaign=200412924a-EMAIL_CAMPAIGN_2017_08_14&utm_medium=email&utm_term=0_cc08d67019-200412924a-80291285

https://www.accountingtoday.com/news/international-standard-setters-aim-to-increase-professional-skepticism