All 18 Fraud & Error Responsibilities questions
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Auditing & Assurance › Fraud & Error Responsibilities

What is professional skepticism's role in detecting fraud?

Beginner

Answer

Professional skepticism—a questioning mind and critical assessment of evidence—is central to fraud detection because fraud is deliberately concealed. It keeps the auditor alert to inconsistencies, contradictory evidence, and conditions signaling fraud, and prevents undue trust in management's explanations or documents that could be falsified.
Real-world example Skepticism leads the auditor to independently confirm a suspicious receivable rather than accept management's assurance it's valid.

Common follow-ups: Why is skepticism vital against concealed fraud? | How can lack of skepticism let fraud pass?

ISA Standards Audit Evidence & Procedures Fraud & Error Responsibilities
All 18 Fraud & Error Responsibilities questions