A December 4, 2012 article in the Journal of Accountancy notes that a “PCAOB alert says audits must be conducted with skeptical eye.” According to that article, the US Public Company Accounting Oversight Board (PCAOB) is reminding auditors to maintain their professional skepticism when they conduct audits.
The Staff Audit Practice Alert states that: “Observations from the PCAOB’s oversight activities continue to raise concerns about whether auditors consistently and diligently apply professional skepticism.” Therefore, Staff Audit Practice Alert No. 10: Maintaining and Applying Professional Skepticism in Audits is intended to assist audit firms in their application of professional skepticism in upcoming calendar year-end audits.
The 16-page Alert further states that the failure to appropriately apply professional skepticism may prevent auditors from obtaining appropriate evidence to support their opinions. Skepticism failures also may prevent auditors from identifying material misstatements in financial statements. Although professional skepticism is important in all aspects of the audit, it is particularly important in areas that include significant management judgment, for example, measurement uncertainty.
Learn more by reading other guidance materials on professional skepticism.
