backOn April 25, 2023, the PCAOB staff published a “Spotlight” titled Professional Competence and Skepticism Are Essential to Quality Audits. The publication highlights the importance of performing work with due care and professional skepticism in five areas or aspects of an audit: client acceptance or continuance; audit planning; identifying and assessing risks of material misstatement; performing work with due professional care; and evaluating the results of the audit. Among other things, the Staff observes that professional skepticism is particularly important in areas of the audit that involve significant management judgments or transactions outside the normal course of business, as well as in the auditor’s consideration of and response to fraud risks. Additionally, the Staff asserts that firms’ quality control systems can improve the application of professional skepticism through appraisal, promotion, and compensation processes.
The PCAOB's Spotlight is available here.