Demonstrating Professional Skepticism

Insights from Recent Research for Auditors of Financial Statements

Douglas M. Boyle, DBA, CPA, CMA, and Brian W. Carpenter, PhD

In BriefDemonstrating professional skepticism while conducting an audit is an important, well-documented expectation of the profession. A skeptical mindset ensures that auditors approach audits recognizing that it is always possible that fraud is present. unfortunately, recent audit deficiencies and failures have raised questions as to whether auditors exhibit an appropriate degree of skepticism. This article reviews the profession's guidance regarding professional skepticism, summarizes the results of studies examining audit deficiencies and failures attributed to a lack of sufficient professional skepticism, and offers suggestions to aid auditors in exhibiting appropriate levels of professional skepticism in audit engagements.