Practical advice from new joint paper on professional skepticism: It’s a case of asking the right questions

Audit inspectors frequently comment on whether or not an audit appears to have been performed with appropriate professional skepticism – a key component of a high-quality audit.

Audit inspectors frequently comment on whether or not an audit appears to have been performed with appropriate professional skepticism – a key component of a high-quality audit. But how does an auditor demonstrate that he or she had this mindset when performing the audit?

Answering this question is the focus of the paper, Practical Ways to Improve the Exercise and Documentation of Professional Skepticism in an ISA Audit, issued jointly by the auditing and assurance staff at the Chartered Professional Accountants of Canada and the Institute of Chartered Accountants in Australia.

The paper notes that throughout the International Standards on Auditing (ISAs), which have been adopted in Canada with minimal amendments, there is an emphasis on the importance of professional skepticism in critically assessing audit evidence. This includes questioning contradictory audit evidence, and the reliability of documents and responses to inquiries and other information obtained from management and those charged with governance. The ISAs explain that there is no one way to document an auditor’s professional skepticism, so the paper offers a practical approach on how it can be done.

The approach in the paper reflects that:

  • members of the engagement team, and others providing assistance on the audit, play different roles in relation to exercising professional skepticism; and
  • there are challenges to enhancing the exercise and documentation of professional skepticism, for example:
    • clearly linking the exercise of professional skepticism with the sufficiency and appropriateness of evidence obtained
    • promoting the exercise of professional skepticism throughout the engagement
    • reinforcing the interaction among senior and junior staff to encourage the exercise of professional skepticism
    • avoiding unnecessary documentation
The paper sets out a series of questions designed to reflect the different roles and levels of those involved in an engagement, including considerations and examples to elaborate on the questions presented. Suggestions are provided as to how the responses to the questions posed may be documented.

The paper recognizes that practice may evolve and encourages feedback to help refine the questions and assist in identifying the best means of demonstrating the exercise of professional skepticism in an effective manner. I believe that positioning the paper in this way is appropriate because there is no one best way of addressing this complex issue. Letting best practices evolve and be shared broadly will ultimately enhance Canadian audit quality. I hope that auditors answer the call for feedback.

Keep the conversation going….what are your views on the approach in the paper? Do you think you can apply it in your practice? How could it be improved?

Post a comment below; or email me directly.


Conversations about Audit Quality is designed to create an exchange of ideas on global audit quality developments and issues and their impact in Canada.

About the Author

Eric Turner, CPA, CA

Director, Auditing and Assurance Standards, CPA Canada


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