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Lifelong skeptics: Auditors must question all information they are provided

Lifelong skeptics: Auditors must question all information they are provided

By the very nature of the job, auditors are expected to be skeptical of the information they are presented, although according to a recent study, some may have lost their way.

The report, titled “Professional Skepticism: Establishing a common understanding and reaffirming its central role in delivering audit quality,” was conducted by England’s Accounting Practices Board (APB) and it laid out the steps that companies must take to ensure that their auditors constantly remain skeptical and pragmatic when assessing a company’s financial profile and organizational strategies.

“A bit of history is also thrown into the mix to help auditors understand their origins,” according to a review on Accountancy Age. “Many may be pleased to know part of their role derived from auditing servants in the manorial estates of the 14th century. The auditor was the most trusted servant in the household and all other servants reported to them.”

One of the problems auditors have is that businesses lack a significant degree of control over contextual and environmental effects that can have a lasting impact on a particular entity. These constantly oscillating factors, coupled with the slightest change in a company process or procedure, could produce unintended consequences that spiral into and cause other issues.

Many companies prefer internal auditing services because of the ease of such processes, in lieu of hiring an external service provider. The report recommends that auditors remain insulated from management so that they can best make objective assessments without the filter of biased business decision makers.

To truly enhance skepticism among auditors, businesses should work with an internal audit consultant that knows how to train these individuals to develop a more discerning eye. When recruiting for auditing positions, this expert will understand who can best best perform these responsibilities adequately.

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