'Professional Skepticism' - FAR Masterclass report 9 October 2019 - Masterclass by Kris Hardies and Sanne Janssen

Kris Hardies is associate professor at the University of Antwerp. Sanne Janssen is lecturer at the Open Universiteit. Professional skepticism is a focal area of their research.  

The research they present is based upon the FAR research project “Professional skepticism profiles, effects on audit processes and outcomes, and the moderating role of audit firm culture” on which they collaborate with Ann Vanstraelen (Maastricht University) and Karla Zehms (University of Wisconsin-Madison).

On October 9 2019, Kris Hardies and Sanne Janssen presented their FAR-masterclass on professional skepticism. Professional skepticism is an important topic, which is high on the agenda of regulators and policy makers. A lack of professional skepticism appears to be related to insufficient audit quality. In this masterclass, the importance and difficulties were discussed of applying professional skepticism during an audit. In addition, some insights from current research were presented. Furthermore, potential ways to improve professional skepticism were considered.  

What is professional skepticism? 
As Arnold Schilder (then Chairman of the IAASB) said in 2012: ‘the need for professional skepticism in an audit cannot be overemphasized’. But what do we mean by professional skepticism? This was asked to the audience members, who discussed the question in small groups. Key words that came up were: independence, questioning mind, challenging the obvious, weigh contradictory evidence and being aware of your own biases. These words resemble to a major extent what’s being said in the literature. Hardies distinguished three definitions of professional skepticism: (1) to have a questioning mind and critically assess audit evidence; (2) to have more doubt about the validity of an assertion than about its invalidity; and (3) to have a mindset and an attitude which are driven by individual determinants and social and situational determinants. The latter definition recognizes that personal and situational characteristics lead to a psychological state, which in turn influences behavior. According to the presenters, this last definition is the most complete and viable definition of skepticism.  

Download the full masterclass report here (opens in PDF).

A pre-masterclass vlog is also available and can be viewed on this page.