Monday, May 26, 2014

Proficiency and Professional Judgment Documentation: the Independent Auditor’s Responsibility


Mohammed J. Masoud, CPA, CACM, CFE, CICA, MBA
The American Anti-Corruption Institute (AACI)

Invited paper presented at the
The Second Accounting and Auditing International Conference
Organized by
 The Palestine Association of Certified Public Accountant (PACPA)

Ramallah – Palestine

May 28-29, 2014

Abstract
This conference paper conducts a review of the published auditing literature with respect to the responsibility of the independent auditor[1] regarding the required level of proficiency she/he should possess in conducting a financial statements audit. It also reviews the independent auditor’s responsibility in documenting her/his professional judgments[2] reached for in a financial statements audit.  The objective of this paper is to address the challenges the independent auditor faces to comply with relevant International Standards on Auditing (ISAs); specifically the International Standard on Auditing 230:” Audit Documentation”. Further, this paper discusses the interrelationships between the independent auditor’s proficiency and professional judgment and their impact on audit effectiveness. We found that independent auditors are requested and expected to document in sufficient and proper details in the audit file (work papers) not only the audit judgments of significant matters, but also to demonstrate that the audit was planned, performed, and opined using the optimum mix and the cutting edge of knowledge, education, experience, rules, regulations, and the relevant auditing and accounting literature.



[1] The terms auditor and independent auditor are used interchangeably throughout this conference paper.

[2] Professional judgment; audit judgment, professional audit judgment; and judgment are used interchangeably throughout this conference paper.

LINKS


The PowerPoint presentation of the conference paper: https://drive.google.com/file/d/0B4sCwzCGinSwTUQ0YjN2UGZtUGs/edit?usp=sharing