Audit is essential to public and investor confidence in companies. It is far from easy to do well, requiring judgement and technical competence, often in complex circumstances. This paper discusses the degree of scepticism that auditors need to apply to conduct an audit to a high standard. .... The application of an appropriate degree of professional scepticism is a crucial skill for auditors. Unless auditors are prepared to challenge management’s assertions they will not act as a deterrence to fraud nor be able to confirm, with confidence, that a company’s financial statements give a true and fair view. However, scepticism can be taken too far; challenging everything in a well run company will slow down the publication of its financial statements and risks unnecessary costs".
Thursday, 5 August 2010
UK: 'Auditor scepticism: raising the bar' - APB discussion paper
The Auditing Practices Board has today published a discussion paper titled Auditor scepticism: raising the bar. The purpose of the paper, which is available here (pdf), is explained in its introduction as follows:
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