Professional Scepticism

Auditors, investigators and reviewers are told things by people who know the business better than they do, and most of those statements are honest. Scepticism does not mean assuming dishonesty. It means keeping an open but questioning mind, asking for evidence, testing it against other sources, and noticing when something does not fit, such as a figure that is too tidy or an answer that changes. It also means not letting familiarity with a client or a manager's seniority soften the questions. Auditing standards require it in every audit, and it is closely linked to the duty to consider fraud risk. Common barriers are time pressure, trust built up over years, relying on past results and confirming what one already expects. Training, challenge from reviewers and fresh team members help counter these. Missed problems usually trace back to a plausible explanation accepted without evidence.

During a stock count, a manager tells an internal auditor that a large pallet of goods is held for a customer and need not be opened. The auditor asks to see the sales order and the delivery paperwork, then asks the warehouse to open the pallet. It contains packaging materials, and the inventory total is corrected.