THE ROLE OF PROFESSIONAL SKEPTICISM IN FINANCIAL STATEMENT AUDIT AND ITS APPROPRIATE APPLICATION

  • Janka Dimitrova
  • Anica Sorova

Abstract

The contemporary financial crisis along with global and complex business environment emphasizes the critical importance of high quality and with credibility financial reporting. The contemporary environment imposes the need for additional and more relevant information related to the entities and processes that support the quality of financial reporting. Independent, external auditors play an important role in supporting the quality of financial reporting process by providing an independent opinion that financial statements present fairly in all material respects, or give a true and fair view of, the reporting entities’ financial position, results of operations, and cash flows, in accordance with an applicable reporting framework.


Auditors adhere to professional standards and legal and regulatory requirements while performing financial statement audits. Those standards require that appropriate professional skepticism be applied in the exercise of professional judgment. The widespread and diversification of business in this modern day, has continued to increase the complexity of business transactions and of accounting standards. Given increased complexity and subjectivity together with a continued emphasis on reliable financial reporting, has elevated the interest in the application of high degree of professional skepticism by the auditors. While a responsibility for appropriate professional skepticism is not the sole domain of financial statement auditors, this paper focuses on professional skepticism applied by auditors in the conduct of a financial statement audit.

Published
Dec 27, 2016
How to Cite
DIMITROVA, Janka; SOROVA, Anica. THE ROLE OF PROFESSIONAL SKEPTICISM IN FINANCIAL STATEMENT AUDIT AND ITS APPROPRIATE APPLICATION. Journal of Economics, [S.l.], v. 1, n. 2, dec. 2016. ISSN 1857-9973. Available at: <http://js.ugd.edu.mk/index.php/JE/article/view/1596>. Date accessed: 23 sep. 2017.
Section
Accounting and Auditing