The Role of Professional

Skepticism in Evaluating
Audit Evidence
Audit and Assurance
Audit is a procedure of closely monitoring the accounting information
provided in a company's financial statements

Assurance is a process for independently ensuring the accuracy of an

audit

Assurance Engagement

An engagement in which a practitioner expresses a conclusion designed to

enhance the degree of confidence of the intended users other than the
responsible party about the outcome of the evaluation or measurement of
a subject matter against criteria
Professional skepticism
Professional skepticism is a mindset that involves
questioning and challenging the information
presented, seeking to identify inconsistencies, biases,
and potential misrepresentations in the data
Why is Professional
Skepticism Important?
Enhancing audit quality
It is essential for ensuring that auditors exercise a critical and
questioning mindset while gathering and evaluating audit
evidence. This helps to improve the quality of audit work and
increases the reliability
Identifying material misstatementsnce
Enables auditors to identify material misstatements in
financial statements, such as errors, fraud, or intentional
misrepresentations
Minimizing audit riskg
It Reduces the risk of overlooking or misinterpreting evidence
that could potentially have a significant impact on the audit
opinion
Meeting stakeholder expectations
By demonstrating a questioning mindset and thoroughly
examining audit evidence, auditors can provide stakeholders
with the assurance they need to make informed decisions
about the financial health of the organization.
Complying with auditing standards
By adhering to this principle, auditors can ensure compliance
with auditing standards and maintain their professional
credibility.
Professional Skepticism
It is essential when evaluating audit evidence.
Auditors need to carefully evaluate the evidence
they are presented with and use their judgment to
determine whether it is sufficient and reliable.

Recognizing individual
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Factors that affect Professional Skepticism

Time constraints may limit the amount of

testing an auditor can perform, which can
affect their ability to identify potential
errors or fraud

If an auditor has a long-standing relationship

with a client, they may be less likely to
question the client's assertions or may be
influenced by their preconceived notions
about the client's integrity
Thank You
For Your Attention