ICAS response to IESBA consultation on professional scepticism

By Ann Buttery CA, Head of Ethics, Policy Leadership Division, ICAS

10 August 2018

Ann Buttery reports on the ICAS Ethics Board’s response to the IESBA consultation on professional scepticism.

The ICAS Ethics Board has responded to the International Ethics Standards Board for Accountants (IESBA) Consultation Paper ‘Professional Skepticism – Meeting Public Expectations’.

The consultation paper explores the behavioural characteristics of professional scepticism; whether all professional accountants should apply these characteristics (i.e. not just auditors); and whether the International Code of Ethics for Professional Accountants (including Independence Standards (the “Code”) should be developed further to help professional accountants better understand their responsibilities in terms of professional scepticism.

Public interest

ICAS welcomes the timeliness of this consultation. To act in the public interest is a fundamental requirement of the accountancy profession. However, in recent years there has been a decline in public trust in business and in the accountancy profession. In the UK, in particular, the wider stakeholders - society, government, regulators, media etc - are expecting more from professional accountants. As societal requirements evolve, and the trust gap continues to grow, codes and standards also need to keep pace.

Characteristics of a professional accountant

ICAS is supportive of the IESBA giving greater consideration to the characteristics which should be expected of professional accountants. We agree that the concept of ‘professional scepticism’ is one of those traits, and enhancement of the concept within the Code could helpfully lead on from the fundamental principles.

The concept of ‘professional scepticism’ is about having an enquiring mindset, and ‘digging deeper’, and we think it would be helpful to animate the Code by having further guidance to elaborate on what it means in more practical terms for professional accountants.

We also suggest that material to incorporate what the public expects of a professional accountant could usefully be included at the beginning of the Code to better highlight the important societal role that the professional accountant plays.

Applicable to all professional accountants

ICAS believes that the concept of ‘professional scepticism’ should be applicable to all professional accountants and not just those performing audit or other assurance engagements. We believe the onus is on all professional accountants to have a challenging nature.


ICAS does not, however, believe that the term or definition of ‘professional scepticism’ as used for the purposes of the International Standards on Auditing is appropriate for use by all professional accountants.

We share the concerns noted by IESBA that the use of one term for two different types of behaviours and expectations would be confusing and could also threaten the robustness of the International Auditing and Assurance Standards Board’s (IAASB) current definition in relation to the critical assessment of audit evidence.

New ‘umbrella’ term

Whilst ICAS believes that the concept of ‘professional scepticism’ should apply to all professional accountants, we would prefer an alternative term to ‘professional scepticism’ when it is being applied to all professional accountants.

We are concerned that the term ‘scepticism’ could cause problems for professional accountants. Whilst at one end of the spectrum the term ‘scepticism’ can be understood as being diligent, at the other, it could be viewed as cynical. We believe that when applying a phrase for all professional accountants, as opposed to just auditors, there is a need to reflect a starting point of an open mind, rather than a mind thinking ‘guilty until proven innocent’.

Instead, therefore, we believe that a new ‘umbrella term’, for example ‘enquiring mindset’ or ‘impartial, diligent and challenging mindset’, should be developed for the Code of Ethics. We believe that the IAASB’s term and definition of ‘professional scepticism’ could then sit as a sub-set of the ‘umbrella term’ being more indicative of how the concept would apply under the specific circumstances of an audit or assurance engagement.

We believe that an ‘enquiring mindset’, when combined with the ‘moral courage’ we believe professional accountants should also be expected to exercise, should ensure that professional accountants do not just ask questions and ignore difficult answers.


ICAS would also support a new definition along the lines of that suggested in IESBA’s consultation paper however we think that the IESBA’s proposed definition could be improved to convey the need for ‘challenge’ – that is, the willingness to ask the right questions, ‘digging deeper’ aspect, of ‘professional scepticism’ - and also the need to take appropriate action.

We therefore propose the following definition:

Approaching professional activities with an impartial, diligent and challenging mindset, applying this mindset and relevant professional expertise to the evaluation of information with which they are associated, and taking appropriate action.

We also note that it is key that the appropriate action is carried out following the diligent analysis of a situation, and this is where ‘moral courage’ comes in.

Additional material

ICAS also believes that additional material in the Code alongside any new term and definition would be helpful to explain the reasoning behind any new term and definition, and what it means in more practical terms. We note the possible issues identified by IESBA, such as scalability, and suggest that matters such as these could be highlighted within the additional material. We also believe that consideration should be given to including further practical guidance on identifying and responding to bias, preconceptions, pressure and other types of impediments to exercising ‘professional scepticism’.


  • Ethics and integrity research
  • The Power of One

Previous Page