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Demonstrating Professional Skepticism - Essay Example

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The paper “Demonstrating Professional Skepticism” critically examines how the auditors can show professional skepticism when carrying out their work. The paper gathers insights from the recent most research on the requirement that auditors should conduct themselves with professional skepticism…
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Demonstrating Professional Skepticism
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Demonstrating Professional Skepticism The article by Boyle et al. critically examines how the auditors can show professional skepticism when carrying out their work. The article particularly gathers insights from the recent most research on the requirement that auditors should conduct themselves with professional skepticism when auditing financial statements. Boyle et al. (2015), explain that demonstrating professional skepticism when carrying out the audit work is of great importance and that it remains a well-documented expectation for the auditing profession. According to them, a skeptical mindset is necessary for ensuring that the auditors approach the work of auditing in a manner that promotes the recognition of the possibilities of fraud.
Boyle et al. (2015) maintain that the audit failures and deficiencies in the practice have become rampant to the extent that it may be questioned whether auditors apply skepticism when performing the audit work. Although all the auditors may approach the audit of financial statements from a skeptical dimension, there is required an appropriate degree of skepticism to be able to recognize some certain level of fraud. The article particularly does a review on the professional guidance that is required concerning professional skepticism on the part of the auditors. The article makes a summary of recent studies that have examined audit failures and deficiencies noting that these have been as a result of failure to apply the appropriate degree of skepticism in auditing. The article proposes the various ways in which the auditors can demonstrate the required level of professional skepticism when approaching the audit work to eliminate the audit failures and deficiencies.
Boyle et al. (2015) observe that the failure on the part of the auditors to exercise professional skepticism when conducting the audit of financial statements imposes costs on the shareholders and other stakeholders. When fraud fails to be recognized, the shareholders are the net losers. The article points to the application of professional skepticism in audit engagements as being the solution to the increased number of audit failures and deficiencies. Professional skepticism has become a matter of critical importance to the profession of auditing given the increased complexity of the audit environment (Boyle et al. 5). The article explains that the exercise of professional skepticism by the auditors is in line with the requirements of the Statements on Auditing Standards 1 (SAS1) (Boyle et al. 5). The standard on auditing requires that the auditors must apply due care with an emphasis on the exercise of professional skepticism as part of the auditor responsibilities and functions.
The role of professional skepticism in the consideration of fraud in the audit of financial statements is analyzed with a proper discussion and relation of the elements of skepticism to the audit (Boyle et al. 6). Boyle et al. (2015) explain that professional skepticism is an attitude that involves a critical assessment and analysis of audit evidence and a questioning mind. It is this questioning mindset that enhances the possibilities of recognizing fraud with less attention to experience.
Works Cited
Boyle, et al. Demonstrating Professional Skepticism. The CPA Journal 39.2 (2015): 1-6. Print. Read More
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