Public Company Accounting Oversight Board member Jeanette Franzel told a group of accounting educators that lack of professional skepticism is one of the main reasons for the prevalence of audit deficiencies found in the PCAOB’s inspections of the work of auditing firms.
In a speech Monday at the American Accounting Association’s annual meeting in Anaheim, Calif., Franzel noted that academic research and PCAOB standards and oversight emphasize that professional skepticism is fundamental to the role and performance of auditors. “Yet the PCAOB and other regulators around the world have expressed concern about the continued high rate of audit deficiencies identified in their inspections and other oversight activities,” she said. “And many of these deficiencies appear to be associated with the insufficient exercise of professional skepticism.”
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