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4. At what stage in the Audit Process is Professional Skepticism necessary?

Updated: Dec 17, 2022

Professional Skepticism is relevant and required throughout the audit, despite the fact that it is not mentioned in every ISA. For example:

1) Engagement Acceptance – For instance, while assessing the integrity of principal owners and management.

2) Identifying and Assessing Risks of Material Misstatement – For example, when:

  • Performing risk assessment procedures (including the engagement team discussion on the susceptibility of the entity’s financial statements to material misstatement, as discussed previously).

  • Revising the auditor's assessment of the Risks of Material Misstatement and making changes to the further planned audit procedures as needed, such as when new information contradicts the audit evidence on which the original assessment was based, or when the auditor becomes aware of changes in circumstances, new information, or a change in his or her understanding of the entity and how it works as a result of performing further audits.