Skip to main content

Looking for Valuant? You are in the right place!

Valuant is now Abrigo, giving you a single source to Manage Risk and Drive Growth

Make yourself at home – we hope you enjoy your new web experience.

Looking for DiCOM? You are in the right place!

DiCOM Software is now part of Abrigo, giving you a single source to Manage Risk and Drive Growth. Make yourself at home – we hope you enjoy your new web experience.

Professional skepticism in the audit process

Sageworks
December 13, 2012
Read Time: 0 min

In the Staff Audit Practice Alert Number 10, issued on December 4th, 2012, the Public Company Accounting Oversight Board (PCAOB) recognized and emphasized the need for all audit firms to apply professional skepticism. They define professional skepticism as “an attitude that includes a questioning mind and a critical assessment of audit evidence” and give insights into how an audit firm can work to maintain that perspective. To help engagement teams improve their professional skepticism, firms can:

  1. Reinforce through “Tone-at-the-Top” messaging,
  2. Enhance attention to professional skepticism through the performance appraisal, promotion, and compensation processes,
  3. Properly train the engagement teams on what it means to be professionally skeptical,
  4. Thoroughly document the audit engagement, especially areas where professional skepticism was exercised, and
  5. Appropriate monitor to validate that professional skepticism policies are being applied consistently and to define corrective actions when needed.

The PCAOB recognizes that the engagement partner plays a critical role in upholding a commitment to professional skepticism. It is the partner’s responsibility to set the appropriate “tone” among the team, a tone that encourages questioning, which might also require questioning management representations. Read their full recommendations here.

Learn more about best practices for ensuring professional skepticism. And request information here to learn more about software that can streamline analytical procedures and give auditors more time to apply professional judgment in critical areas.

To maximize value with your business clients, learn how you can start providing additional consulting services in this whitepaper: A Beginner’s Guide to Providing Business Advisory Services.

About the Author

Sageworks

Raleigh, N.C.-based Sageworks, a leading provider of lending, credit risk, and portfolio risk software that enables banks and credit unions to efficiently grow and improve the borrower experience, was founded in 1998. Using its platform, Sageworks analyzed over 11.5 million loans, aggregated the corresponding loan data, and created the largest

Full Bio

About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

Make Big Things Happen.