Professional Skepticism In Accounting Ethics

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Professional Skepticism is not new in the accounting profession, in fact, it was first labeled as such in 1977 in SAS (Statement of Auditing Standards) 16 (Ray 2015). Professional skepticism is a critical trait of an auditor. Both international and US audit standards call for professional skepticism as a key component of an audit (PCAOB 2012; IAASB 2016). The Public Company Accounting Oversight Board (PCAOB), created as a result of the Sarbanes-Oxley act of 2002, has cited a lack of professional skepticism many times and it is one of the major audit deficiencies cited against accounting firms and auditors (Beasley et al. 2013; Manita and Najoua 2015; Boyle and Carpenter 2015). An auditor with a higher professional skepticism will be more difficult…show more content…
Prior research has stated that professional skepticism is an attitude followed by the act of being skeptical (Nelson 2009; Hurtt et al 2013; Robinson, Curtis, and Robertson 2018). Professional Skepticism is defined as "an attitude that includes a questioning mind and a critical assessment of audit evidence" according to the PCAOB (2012). Professional skepticism has a trait and a state component (Hurtt, 2010; Robinson, Curtis, and Robertson 2018). Trait skepticism is a characteristic of an individual developed over time while state skepticism is induced in a moment based on a situation or circumstance (Hurtt 2010; Robinson, Curtis, and Robertson 2018). Prior to 2010, there was no clearly defined scale published to measure professional skepticism. Due to this, the Hurtt Professional Skepticism Scale (HPSS) was researched and developed (Hurtt 2010). The HPSS was developed to score trait professional skepticism based on six characteristics. Hurtt states the six characteristics include "a questioning mind, a suspension of judgment, a search for knowledge, interpersonal understanding, self-esteem, and autonomy" (Hurtt 2010; Hurtt et…show more content…
Research has linked skeptical behavior of an auditor to trait professional skepticism (Hurtt, Eining, and Plumlee 2012), explored how trait skepticism and experiences with a client impact auditor judgment (Popova 2012), the impact that industry specialization may have on professional skepticism (Grenier 2016), and validation of the HPSS and the development of a process for state skepticism scale development (Robinson, Curtis, and Robertson 2018). The primary focus of prior research using trait skepticism has been on the decisions made by auditors in relation to skepticism, not if trait skepticism can be altered due to training. In the discussion of audit training, Hayes administered the trait professional skepticism scale on auditing students to see if those who ranked high in trait skepticism made more skeptical assessments of the management fraud risk (Hayes 2016). The focus is on the decisions made and does not test the impact of audit training or teaching skepticism on ones' trait professional skepticism. Research has also shown that audit training may indeed reduce the difference between those with high skepticism and low skepticism (Fullerton and Durtschi 2004), this research was suggested prior to the development of the HPSS to analyze trait

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