Effectively Applying Professional Skepticism to Improve Audit Quality

Learning from Past Audit Failures

Richard Coppage, CPA, CMA, and Trimbak Shastri, CA, CMA, CIA

In planning and performing an audit, including the preparation of the audit report, an auditor is required to exercise due professional care. Implicit in this responsibility is maintaining an attitude of professional skepticism. Upholding such an attitude in practice, however, can be difficult. This discussion highlights some situations identified by the PCAOB that involve auditors’ failure to maintain a skeptical attitude. These situations, together with some specific strategies, can help auditors avoid similar or comparable failures.