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Professional Competence and Skepticism Are Essential to Quality Audits
- 30 May 2023
- Auditing and Assurance
- South African Accounting Academy
The PCAOB was created to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports.
Periodically, the staff of the Public Company Accounting Oversight Board (PCAOB) provides reminders to auditors on applying specific PCAOB requirements, including relevant examples.
PCAOB staff reminds auditors of the importance of critically assessing the firm’s capabilities, obtaining proper understanding of the company they are auditing, and performing work with due professional care and professional skepticism. These matters are particularly important in circumstances where changes to economic conditions or other factors affect the company.
The application of professional skepticism – an attitude that includes a questioning mind – is critical to planning and performing high quality audits and ensuring investors are protected. To apply professional skepticism effectively, auditors should have the necessary industry expertise and knowledge of the companies they audit. Although an auditor’s specialist can assist an auditor in various aspects of an audit, the auditor is required to have sufficient knowledge of the subject matter being addressed to properly supervise the engagement. Without the necessary expertise, firms should not accept such engagements.
Click here to download the PCAOB Spotlight publication:
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