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Exercising Professional Skepticism: a Distrust Factor:
case study in Internal Auditing
• Fear of Repercussions: The procurement
This case study illustrates how professionalism, team fears that negative findings might lead to
ethical conduct and effective communication can disciplinary action or job loss.
help internal auditors navigate distrust and fulfill • Misconceptions about the Auditor’s Role:
their role effectively. Management perceives the auditor as an
investigator rather than an advisor for process
An internal auditor is conducting a routine audit in improvement.
a manufacturing company. During the review, the • Past Negative Experiences: If previous audits
auditor identifies potential financial discrepancies led to punitive actions rather than constructive
and inefficient procurement practices. The auditor feedback, the department may hesitate to share
requests supporting documents and explanations information.
from the procurement head, but the department
becomes defensive and reluctant to cooperate. Resolution:
• The internal auditor reassures management
that the goal is to enhance efficiency, reduce
risks and strengthen controls.
• The auditor involves senior leadership to
reinforce the importance of transparency.
• Instead of a rigid approach, the auditor
collaborates with departments to recommend
improvements nurturing a culture of trust.
Professional Skepticism matters:
In the realm of auditing, the need for professional
skepticism cannot be over-emphasized as adopting
Professionalism Displayed: and applying a skeptical mindset is a professional
responsibility to be embraced by every auditor. In
• Maintaining Objectivity: The internal auditor the increasingly complex business environment,
remains neutral and focuses on facts rather auditors must be confident to challenge
than making accusations. management on a range of matters relevant to the
operations of the entity. Skepticism is crucial for
• Clear Communication: The auditor explains ensuring audit quality, detecting risks, ensuring
that the objective is to improve internal compliances and safeguarding the credibility
controls and not to target individuals. of the auditor’s report. A good auditor must be
skeptical but not distrustful. He should question
• Following Ethical Standards: The auditor information logically while maintaining fairness
adheres to stipulated guidelines in this regard. and professionalism.
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37 INTERNAL AUDIT TODAY
