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The proposed guidance clarifies their application, namely:
- how compliance with the fundamental principles in the Code supports professional skepticism by auditors and assurance practitioners for audit, review, and other assurance engagements; and
- the importance of professional accountants obtaining a sufficient understanding of the facts and circumstances known to them when exercising professional judgment in applying the conceptual framework underpinning the Code.
“Compliance with the fundamental principles and professional skepticism are essential obligations of professional accountants for audit and other assurance engagements,” said IESBA Chairman Dr. Stavros Thomadakis. “We are articulating for the first time the linkage between the two, making clear the important role that the fundamental principles play in enabling auditors and assurance practitioners to meet the public’s expectations about exercising professional skepticism.”
The proposed guidance addressing the fundamental principles and professional skepticism responds to a recommendation from the tripartite Professional Skepticism Working Group established by the IESBA, the IAASB, and the IAESB.
“While developing this guidance, the IESBA also emphasizes the importance of professional accountants not simply accepting information at face value when exercising professional judgment,” noted IESBA Technical Director, Ken Siong.
Once finalized, this material will be included in the clarified and restructured Code that the IESBA plans to complete by the end of 2017. Beyond this, the IESBA will continue to explore further issues relating to professional skepticism in close coordination with the IAASB and IAESB, and in consultation with stakeholders.
Comments are requested by July 25, 2017.