Lesson: Professional Skepticism

In this lesson, Nick Palazzolo, CPA, delves into the concept of professional skepticism, emphasizing its importance in the auditing process. He explains that professional skepticism does not involve accusing management, but rather critically assessing audit evidence and seeking independent verification. Throughout the lesson, he covers six key traits of professional skepticism and highlights the significance of corroborating evidence and being alert to possible misstatements due to error or fraud. Nick also underlines the need for understanding interpersonal relationships within the company and maintaining self-confidence and self-determination as an auditor. He concludes the lesson by stressing the importance of detecting both error and fraud in financial statements.