CAEA 3228 ADVANCED AUDITING

Mini Assignment
DR. Noor Adwa Binti Sulaiman

DISCUSS ABOUT THE IMPORTANCE OF PROFESSIONAL

SCEPTICISM IN ENSURING AUDIT QUALITY
Group
Group members:
members:
Intan
Intan Najwa Binti Abdullah
Noramirah
Noramirah Binti Samsul Saharudin
Nor
Nor Adli
Adli Syahirah
Syahirah Binti
Binti Abdullah
Abdullah
Nur
Nur Saiyidah
Saiyidah Binti
Binti Mardi
Mardi

CEA 120028
CEA 120067
CEA
CEA 120066
120066
CEA
CEA 120077
120077

Professional Skepticism?
ISA 200, paragraph 13(l) : an attitude that includes a questioning mind, being
alert to conditions which may indicate possible misstatement due to error or
fraud, and a critical assessment of audit evidence.
The auditor should assume that management is either honest nor dishonest.
mindset that drives auditor to adopt questioning approach in performing audit
works
Related to ethical principles which is objectivity and independence principles
Education, training and experience will influence professional skepticism.

Audit Quality?
Periodic, independent, and documented examination and verification of
activities, records, processes, and other elements of a quality system to
determine their conformity with the requirements of a quality standards
Any failure in their proper implementation may be published publicly and
may lead to a revocation of quality certification.
Also called conformity assessment or quality system audit.

How scepticism influence an auditors professional

judgement??
Auditors are selected and appointed by management and receive audit service fees from
them. In order to ensure the quality of audit, they are expected to be objective and
independent.
It is important to know to what extent the relationship between the auditors and the
company
Professional judgement is the application of relevant training, knowledge and experience.
Auditors must be sceptical/alert to circumstances as follows:
Engagement acceptance more sceptical when considering audit engagement from a
new client because no past experience of the clients integrity.
Sufficiency and appropriateness of audit evidence more sceptical in a situation that
indicates possible fraud.
Reliability audit evidence dont merely accept the information given by audit clients
without questioning its reliability.

 The risks of material misstatements due to fraud- Fraud may be created if auditor
fail to perform reasonable care and skills
Accounting estimates- Sceptical in judging the assumption used by the
management
Going concern-Highly sceptical in their judgement when evaluating financial
statement disclosures and its implications on the auditors report.
An auditors assessment will be more critical when he is more sceptical and alert
to the facts and conditions he encounters during his audit engagement
The attitude of being sceptical facilitates him to appropriately apply his
professional judgement regarding decisions about audit procedures to use

Conclusion
Professional scepticism and professional judgement are
interrelated.
An auditor might not be sceptical if he is not independent.
There is possibility that an auditor can produce wrong judgement if
he is not sceptical to consider the validity of the assurance
regarding clients financial statement.
Auditor must maintain professional scepticism and heighten the
scepticism in certain areas.