Professional Skepticism: Practitioners’ Perceptions And Training Practices

Main Article Content

Jodi L. Gissel

Keywords

Professional Skepticism; Auditor Skepticism; Tax Practitioner Skepticism; Professional Skepticism Training

Abstract

While regulators criticize auditors for lacking appropriate professional skepticism (SEC, 2010, 2013; PCAOB, 2012), auditing standards lack a clear, consistent definition (Nelson, 2009; Hurtt, Brown-Liburd, Earley, & Krishnamoorthy, 2013), leaving application of professional skepticism “open to interpretation” (Glover & Prawitt, 2013, p. 2). If individual auditors view professional skepticism as open to interpretation (i.e., subjective), auditors may believe they are appropriately applying standards on professional skepticism based on their individual interpretations. However, if regulators apply a different definition of professional skepticism when reviewing auditors’ work, this may help explain ongoing criticisms from regulators stating auditors lack appropriate professional skepticism. The author reports insights of 66 auditors’ perceptions and finds the majority believe professional skepticism has a subjective (as opposed to uniform) definition. This finding is consistent across auditor rank and firm size, suggesting the potential for variations in application of professional skepticism in practice. Supplemental analyses indicate tax practitioners are more likely than auditors to view professional skepticism as subjective, particularly at the partner rank. The author presents professional skepticism training practices for 25 firms that suggest most firms recognize the importance of professional skepticism training and its regular reinforcement. However, there are concerns surrounding the fact that mentoring is listed as the most common training method, which lacks benefits of more formal training activities. Overall, this study provides relevant insights from practitioners and strengthens recent calls for developing a “common definition and shared understanding” of professional skepticism and a framework for evaluating application of professional skepticism (Glover & Prawitt, 2014, p. 5-6).

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