Professional Scepticism

Question 1

Professional scepticism

Answer 1

Here are the smart notes:

Professional Skepticism

Definition
Professional skepticism is a critical assessment of evidence, requiring chartered accountants to question and verify information.

Relationship with Fundamental Principles
Compliance with fundamental principles supports professional skepticism.

Examples of Applying Fundamental Principles

Integrity
1. Being straightforward and honest when raising concerns
2. Pursuing inquiries about inconsistent information

Objectivity
1. Recognizing circumstances that might compromise judgment
2. Considering the impact on judgment when evaluating evidence

Professional Competence and Due Care
1. Applying industry-specific knowledge to identify risks
2. Designing and performing appropriate audit procedures
3. Critically assessing evidence

Outcome
Compliance with fundamental principles enables chartered accountants to exercise professional skepticism, ensuring a critical and informed approach to audit and assurance engagements.