Professional Scepticism When Conducting An Audit

Professional scepticism is an attitude or mindset that is used by auditors when conducting an audit. It is used in order to help the auditor assume a position that is objective and unbiased throughout the audit. It is viewed by many within the auditing profession as an essential quality that the auditor must possess when conducting audit and can be a major factor in audit quality. But it is not the only factor when it comes to obtaining high audit quality, with audit quality itself be hard to define.

Despite several researches over years, there is no exact definition of audit quality or the way to measure it. However, according to Tepalagul & Lin (2015), the audit quality can be understood as auditor independence and auditor capabilities. Auditor independence can be …show more content…
Understanding the difference between two different types of auditor independence, Independence of Mind and Independence of Appearance, are also necessary in auditing. According to Gay & Simnett (2015, p. 108), Independence of Mind can be described as the state of mind, which provides an opinion without any affection from professional judgment. It is contributed mainly by three factors: integrity, objectivity and strength of character. On the other hand, Independence in Appearance shows when financial report users believe that actual independence was achieved. It means that the audit assurance will only be derived when auditors are independent. Beside two types of auditor independence, it is also important to understand major threats that can affect to auditor independence. These threats include auditor employment relationships, financial and business relationships and provision of non-audit services and are categorised into five types: self-interest, self-review, advocacy, familiarity and intimidation (Gay & Simnett 2015, p. 106 -107). Also according to Gay and Simnett (2015, p. 109), there are three kinds of safeguards to these