The Practice of Professional Scepticism in Auditing

  • Yasser Alnafisah

Student thesis: Phd


During the last decade, auditors’ exercise of Professional Scepticism (PS) has been increasingly criticised by accounting regulators worldwide, such as by Financial Reporting Council (FRC) in the United Kingdom (UK). Existing studies in auditing literature have indicated that exercising the appropriate level of scepticism is made difficult due to the lacking understanding of PS. Despite attempts being made in the extant literature to problematize PS as a concept, what PS actually means in practice remains unclear. This study aims to explore and understand how practicing professional auditors internalise and operationalise the concept of PS in practice. This study employs a qualitative research approach to investigate the meaning of PS in auditing in the context of the practical experience of external financial statements auditors. The primary data collection method has involved semi-structured interviews with 44 research participants, namely; professional auditors working in the Big Four audit firms in the UK. The Social Intuitionist Model (SIM) is used to provide explanations of PS practical meaning that appreciate the role of gut feeling (emotion) in shaping auditors’ PS practice whilst being mindful of the reasoning process. Using such a theoretical framework helps to provide a holistic interpretation of PS which can uncover its nature and constructs, the interaction between its cognitive aspects, and the process upon which auditors make their everyday professional judgment. Drawing on the review of the relevant literature, the use of SIM and the analysis of interview evidence, the PS Process Model (PSPM) has been developed to summarise this study’s findings. The PSPM indicates that PS should not be confined to certain personal traits that can only be possessed by some people, nor an indefinite cognitive state in which the nature of PS is absent. Rather, it provides a more holistic and practical understanding of PS as an ongoing process. It shows that this process is initiated, constructed and refined by an emotional state (Gut Feeling of Discomfort [GFD]) that auditors experience. This emotional state is sourced by certain negative consequences relevant to reviewers’ expectations, and triggered, shaped and channelled through auditors’ accumulated knowledge and the fact-pattern available (i.e. triggers of GFD). It emphasises that the tension between the feelings of comfort and discomfort that auditors can experience shapes the PS process. The PSPM specifically illustrates how social interaction with others (client personnel and audit team members) can influence auditors’ GFD and be used to act upon their sceptical judgment (including pursuing certain efforts to influence others to accept their judgment). This study provides methodological and empirical contributions by providing evidence on the practical meaning of PS drawn from interviews with practicing professional auditors from different positions in the audit team organisational hierarchy. Furthermore, by using a theoretical perspective (SIM) from the field of psychology, this study provides a new perspective in interpreting PS as an ongoing process initiated and developed as an emotional state, emphasising the role of gut feeling in the auditing JDM process and providing empirical evidence that demonstrates how professionals’ feelings of comfort/discomfort can be more related to their own well-being than those people they are acting on behalf of.
Date of Award31 Dec 2019
Original languageEnglish
Awarding Institution
  • The University of Manchester
SupervisorWilliam Turley (Supervisor) & Anna Samsonova - Taddei (Supervisor)


  • Audit Ethics
  • Intuition
  • Audit Quality
  • Gut Feeling
  • Professional Scepticism
  • Auditing
  • Professional Judgment

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