Auditors’ Professional Skepticism

Abstract

The International Standard on Auditing (IFAC, International Federation of Accountants (2009) in International Standard on Auditing 200 (ISA 200) Overall objectives of the independent auditor and the conduct of an audit in accordance with international standards on auditing. International Federation of Accountant (IFAC), NY, 2009, ISA No. 200) defines professional skepticism as a multifaceted mindset reflected in auditors’ attitude. The professional skepticism multifaceted mindset is reflected in auditors’ attitude and includes a questioning mind, alertness to circumstances that may imply misstatements due to error or fraud, and a critical evaluation of audit evidence (IFAC, International Federation of Accountants (2009) in International Standard on Auditing 200 (ISA 200) Overall objectives of the independent auditor and the conduct of an audit in accordance with international standards on auditing. International Federation of Accountant (IFAC), NY, 2009, ISA No. 200). In this chapter explains what professional skepticism is more in depth, why it is important to study professional skepticism and then discusses the challenges encountered by accounting researchers, professionals and regulators with respect to professional skepticism in accounting. Because an experimental study of professional skepticism is conducted in Norway, the chapter also presents the institutional settings in Norway. Finally, the chapter describes Two-System theory and affect which are used in the experimental study in the Chap. 2.