In the accounting world finance professionals, and in particular auditors, and are being asked to demonstrate professional scepticism. With more assumptions being made and opinions sort, finance is now not only about facts so exercising professional scepticism is increasingly important.
The international Standards on Auditing (ISA) has identified this and started to check much more thoroughly whether auditors are adhering to ISA 220, the regulation affecting this area. In the last two weeks alone international firm Deloitte has come under fire for not exercising enough professional scepticism over 1Malaysia Development Berhad's (1MDB) financial statements. And they are not the only body to be stressing the importance of this subject; both the UK Financial Reporting Council (FRC) and the International Auditing and Assurance Standards Board (IAASB) have both issued statements in recent years.
But exactly what is professional scepticism and how can you know if you comply? A new course published in September by Nelson Croom aims to answer all the key questions for accounting professionals and more. It is now available from www.accountingcpd.net.
And if you need more evidence that this subject should be one of importance for every auditing professional then read this article in the ICAEW’s publication, Economia, earlier this year that states that a third of all audits inspected by the FRC in the last year were found wanting in that area.
Makes you think doesn’t it...