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Professional scepticism: inside the mind of the auditor


19 Oct 2017


Euro & Finance

International regulator and EU experts explored the impact of cognitive biases on auditors at a recent ACCA professional scepticism roundtable in Brussels

The issue of professional scepticism in audit remains a critical area.  Auditors’ perceived lack of professional scepticism is seen by audit oversight bodies and the public as being at the root of issues with audit quality. This criticism has risen in importance since the global financial crisis, and auditors and standard-setters are under pressure to enhance professional scepticism. 

As part of efforts to enhance audit quality, the IAASB, IESBA and the IAESB issued a joint publication called 'Toward Enhanced Professional Skepticism', in which they note that the importance of enhanced professional scepticism is underscored by the increasing complexity of business and financial reporting.

ACCA (the Association of Chartered Certified Accountants) is also shedding some light on the debate, from the perspective of cognitive biases. The global accountancy body published a report called Banishing bias? Audit, objectivity and the value of professional scepticism,  which was the basis of a lively experts debate in Brussels.

Discussions revealed that everybody has a role to play in supporting the exercise of professional scepticism: auditors can do more but others must support them too. The debate clearly revealed that bias is everywhere in human decision-making. Stakeholders need to work with natural human biases, rather than ignoring them. It was also stressed that awareness of bias can help to mitigate it, and several speakers acknowledged the contribution of ACCA’s report towards improving the exercise of professional scepticism.

Maggie McGhee, Director of Professional Insights at ACCA said: “Finding ways for auditors to apply higher levels of professional scepticism is a key challenge facing the profession. But audit quality will only be improved further when all actors in the financial reporting process understand how cognitive biases impact the use of information in decision making”.

“Good regulators recognise the danger of hindsight when monitoring audits. But some commentators are still jumping to the unfair conclusion that whenever a company does something wrong, the company’s auditor must be to blame somehow. A more measured dialogue is necessary to deliver improvements in audit quality”.

Arnold Schilder, Chairman of the IAASB added: Professional scepticism is about asking ourselves ‘how do we know and how can we be so sure?’. It is about asking critical questions. Audit quality is best achieved in an environment where there is both support and challenge from other participants. Auditors also should be challenged by other stakeholders”.

“We need to talk about this topic because of two factors: complexity and uncertainty.  Auditors need to share and explain to people the complexity of judgments behind numbers. We are humans, therefore biases cannot be avoided. We can only minimise the risks but we need to be more proactive and learn how to ask the right questions. Professional scepticism must be incorporated into daily practice that is understandable – it cannot only be a high-level concept”.




Notes to editors

About ACCA

Contact: Cecile Bonino, Head of EU Affairs,  tel: +32 (0) 2 286 11 37 or

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 188,000 members and 480,000 students in 181 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 95 offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here:

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