Case 16-5 Skeptical Lens

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Case 16-5 Skeptical Lens

To: Professor John Li Department of Economics Hunter College
From: Yuen Mei Hau
Re: Skeptical Lens
Date: November 3, 2017
Summary: The objective of this article is to clarify the significance of professional skepticism as an essential part of the auditor’s mindset, and to consider the reasons why approaching an audit with an attitude of professional skepticism is becoming increasingly important. The following are three case studies that will concentrate your consideration on what it takes to be a skeptical auditor when performing journal entry testing.
Definition of Professional Skepticism
PCAOB standards explain professional skepticism as an
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Challenges to Professional Skepticism
A commonplace argument as to why professional skepticism isn’t always as accepted because it ought to be that the limitations are too excessive. A number of barriers have been recognized internationally.
Similar to workload needs, the subsequent instances can obstruct auditors’ application of professional skepticism, in step with the PCAOB:
• Pressures inherent within the audit method (e.g., incentives to maintain client relationships, keep audit costs down, or avoid conflicts with management).
• Trust in management, that is mainly commonplace in long-term client relationships.
• Lack of training and expertise, as auditors must know what to
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