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THE ROLE AND MINDSET EXPECTED OF PROFESSIONAL ACCOUNTANTS

International Ethics Standards Board for Accountants (IESBA) is calling for comments on its draft Proposed Revisions to the Code to Promote the Role and Mindset Expected of Professional Accountants.  

Some of the key points from the report:

The concept of professional skepticism is most prominently dealt with in auditing and assurance standards. In this regard, the International Auditing and Assurance Standards Board’s (IAASB’s) International Standard on Auditing (ISA) 200 defines professional skepticism as “an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of audit evidence.”

The term “professional skepticism” has also been referred to in the Code. and in the International Education Standards (IESs) for a number of years. Consistent with the use of the term in the ISAs, the Code has historically referred to professional skepticism in the context of audit, review and other assurance engagements only.

Over the past few years, however, there have been calls for the Standard-setting Boards to enhance the way in which existing material in their standards addresses ‘professional skepticism’. In response to these calls and recommendations from a tripartite Professional Skepticism Working Group (PSWG) established by the IESBA, IAASB and IAESB, the IESBA undertook a short-term professional skepticism project in 2017.

As part of this short-term project, the IESBA developed application material to (a) supplement the few references to professional skepticism in the Code by explaining how compliance with the fundamental principles supports the exercise of professional skepticism, and (b) illustrate this linkage in the context of an audit of financial statements. In addition, the IESBA developed new application material relating to the exercise of professional judgment. This new material is contained in the revised and restructured Code, which was issued by IESBA in April 2018 and became effective in June 2019.

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