Factors Influencing Auditors' Professional Scepticism: Malaysian Evidence

Abstract

The practice of professional scepticism is an essential element to audit quality. An auditor is required to have a sceptical attitude to minimize the mistakes made during the examination or investigation of financial statements. However, the occurrences of corporate scandals among the audited companies had affected the public’s confidence and the blame was shifted on auditors for ineffective application of professional scepticism. Therefore, this study examines the potential factors that influence auditors’ professional scepticism including auditors’ trust, locus of control, and fraud risk assessment. The primary data were collected through the questionnaires given to the auditors from public accounting firms in Kuala Lumpur. The results of this study show that the attitude of professional scepticism has no significant bearing on auditors’ level of competence (knowledge and experience). Whereas, there are positive relationships between auditors’ trust, fraud risk assessment, work internal locus of control and professional scepticism.