Ethics board looks at professional scepticism and judgment

The International Ethics Standards Board for Accountants (IESBA) is consulting on new guidance on professional scepticism and professional judgment, which will emphasise the importance of accountants not simply accepting information at face value, and will be included in a planned revision of its code of ethics for professional accountants due at the end of this year

The guidance is intended to clarify how compliance with the fundamental principles in the ethics code supports professional scepticism by auditors and assurance practitioners for audit, review, and other assurance engagements; and the importance of professional accountants obtaining a sufficient understanding of the facts and circumstances known to them when exercising professional judgment in applying the conceptual framework underpinning the code.

Stavros Thomadakis, IESBA chairman, said: ’We are articulating for the first time the linkage between the two, making clear the important role that the fundamental principles play in enabling auditors and assurance practitioners to meet the public’s expectations about exercising professional scepticism.’

The proposed guidance has been developed following a recommendation from the tripartite professional scepticism working group established by the IESBA, the International Auditing and Assurance Standards Board (IAASB), and the International Accounting Education Standards Board (IAESB).

Once finalised, this material will be included in the clarified and restructured code that the IESBA plans to complete by the end of 2017. Beyond this, the board says it will continue to explore further issues relating to professional scepticism in close coordination with the IAASB and IAESB, and in consultation with stakeholders.

Comments on the draft guidance should be made by July 25.

The Exposure Draft, Proposed Application Material Relating to Professional Skepticism and Professional Judgment is here.

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