Professional Skepticism

Vocabulary flashcards covering key concepts from the lecture notes on professional skepticism.

Professional skepticism

An attitude including a questioning mind and a critical assessment of audit evidence.

Questioning mind

An ongoing questioning of whether information and evidence obtained suggests a material misstatement due to fraud.

Suspension of judgment

Withholding judgment until there is an appropriate level of evidence to base a conclusion.

Search for knowledge

A sense of general curiosity or interest; skeptics seek knowledge rather than solely to verify a preselected conclusion.

Interpersonal understanding

Understanding the motivation and integrity of individuals providing evidence; recognizing incentives and opportunities to present misleading evidence or commit fraud, including the possibility of less-than-truthful communication.

Self-esteem

Enables an auditor to resist persuasion and challenge others’ assumptions; values one’s own insights as highly as others.

Autonomy

The ability to objectively evaluate audit evidence to determine if it is sufficient to render a judgment.

Material misstatement due to fraud

A misstatement in financial statements arising from fraudulent activity.

Evidence

Data and information used to form audit conclusions and assess whether misstatements exist.

Incentives and opportunities

Motivations and opportunities available to client personnel to present misleading evidence or commit fraud.

Less-than-truthful communication

Evidence or statements that are not fully truthful.

Skepticism Scale Scoring

A method for quantifying professional skepticism; involves reversing scores on certain items and summing to a total score.

Reverse scored items

Items 1, 10, 11, 16, 17, 19, 25, and 26 are reverse scored when computing the total.

Score range

Total Skepticism scores can range from 30 to 180.

Example scoring

For a reverse-scored item, if you circled 6, 7 - 6 = 1; if you circled 3, 7 - 3 = 4.