Why is absolute assurance in auditing impossible?

Characteristics of professional skepticism

Professional skepticism is a state of mind where auditor question and collect sufficient and appropriate audit evidence before accepting client management assertion or explanation. Professional skepticism help auditor reduce audit risk and hence issue an opinion which will increase the credibility of financial statements.

The following are characteristics of professional skepticism

  • Questioning of management explanation: for auditor to exercise professional skepticism he must not take management explanation at face value. He should ask question and seek supporting documents before accepting the explanation
  • Looking for evidence beyond prescribed procedures or standard. Professional skepticism need auditor to seek further evidence when they are not satisfied with available evidence even if they have performed all prescribed procedures. In other words professional skepticism require auditor to be satisfied that all necessary information are collected before making any conclusion.

  • Another characteristics of professional skepticism is that it requires auditor’s independence both in appearance and in mind. To exercise professional skepticism auditor is required to be independent and avoid all threat to independence which may impair his objectivity. Threats to independence are such as self interest threat, advocacy threat and familiarity threat

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