Professional scepticism and audit quality - part 1

In this lesson

1. 0:00 Advanced Audit and Assurance lesson overview
2. 1:06 Professional scepticism and audit quality explained
3. 2:33 Why IFRS principles require greater scepticism
4. 3:40 Accounting estimates and management judgement
5. 4:13 Going concern and related party auditing
6. 5:37 IAASB framework for audit quality
7. 6:49 Building quality through people and procedures
8. 7:58 Review processes and stakeholder engagement

About this lesson

The video explains how the International Audit and Assurance Standards Board guidance on professional scepticism applies to high-risk areas like accounting estimates, going concern assessments, related party transactions, and compliance with laws and regulations — all areas where management judgement and potential bias require your careful scrutiny. You'll discover why the principle-based nature of IFRS demands auditors to look beyond the surface and challenge assumptions, particularly where financial statements involve subjective decisions or forward-looking forecasts. The session also introduces the IAASB's framework for audit quality, outlining the key elements that define a high-quality audit. These include the right people with appropriate skills and experience, sufficient time and resources to perform rigorous work, robust quality control procedures with proper review hierarchies, and meaningful engagement with those charged with governance. Understanding these quality drivers prepares you to apply professional scepticism systematically throughout your audits and demonstrates the interconnection between sceptical thinking and overall audit effectiveness — essential knowledge for the Advanced Audit and Assurance paper.

Duration: 9m