Scepticism and bias remain concerns despite audit improvement, ACCA finds

Professional scepticism remains a key focus for the audit profession, despite “significant” work on improving audit standards in this area, according to research by ACCA and HAASOB.

The joint report concluded that auditors “need to continue to improve their approach to professional scepticism, making full use of the right resources and auditing standards”.

One of the key elements in promoting the exercise of an appropriate level of scepticism in audit work, according to the report, is for auditors to be “aware of cognitive biases”.

It said that “although cognitive biases may explain auditors’ failure to exercise proper professional scepticism at the appropriate level, it is not the only reason; other factors such as fear of losing an audit engagement also impact professional scepticism”.

Similarly authority bias – the tendency to attribute greater accuracy to the opinion of an authority figure – could have a “key impact” on the quality of audits given the extensive and increasing use of experts, particularly, in specialised sectors and sustainability assurance engagements.

The report also highlights the importance of a “robust exercise” of professional scepticism and emphasises the importance of recognising the influence of cognitive biases on auditors and other stakeholders.

Mike Suffield, director of policy and insights, ACCA, said: “The audit profession is currently undergoing major reform globally with the enhancement of audit quality being one of the top priorities. The exercise of an appropriate level of professional scepticism is an integral part of high-quality audits.”

Panagiotis Giannopoulos, deputy chairman, HAASOB, added: “In this report, HAASOB and ACCA, set out some of the recurring issues, often highlighted in audit inspections, relating to the auditors’ performance in exercising professional judgement and professional scepticism, using examples inspired by inspection findings.”