Think Like an Auditor: Make Professional Skepticism Your Superpower

15 Aug

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You don’t need to be an auditor to benefit from professional skepticism. In fact, if you’re an accountant, whether in practice or in a company’s finance team, this mindset could be the key to protecting your clients, your career, and your credibility. With the International Auditing and Assurance Standards Board (IAASB)’s newly updated Fraud and Going Concern audit standards landing in 2026, there’s a renewed focus on skepticism across the entire financial reporting chain, not just for auditors. Why? Because fraud and financial collapse rarely happen in isolation. They often grow quietly inside systems that accountants work with every day. And spotting the warning signs isn’t just the auditor’s job, it’s yours too.

What Is Professional Skepticism?

Professional skepticism is a mindset that involves maintaining a questioning attitude and critically assessing financial information. It means being alert to inconsistencies or unusual patterns and verifying information rather than accepting it at face value.

It is not about being distrustful or cynical. Rather, it is about being careful, curious, and balanced. You consider both evidence that supports management’s view and evidence that might contradict it. This approach helps accountants avoid errors, uncover potential fraud, and make more reliable, informed decisions. It strengthens the quality of your work, protects your clients or business, and enhances your credibility as a finance professional. It’s the ability to:

Stay alert to things that don’t quite add up
Ask the tough questions, even when it’s uncomfortable
Seek out both supporting and contradictory information
Challenge assumptions and look beneath the surface.

It’s not about being cynical. It’s about being smart, cautious, and curious, especially when you're reviewing financials, preparing reports, or advising clients on decisions that carry risk.

How It Really Works in Practice

Let’s break it down into everyday actions:

Maintain a questioning mindset. Stay curious. Ask, "Why was this figure used?" or "Is this realistic?" A questioning approach helps uncover assumptions or gaps.
Suspend judgment, then verify. Don’t jump to conclusions. Look for evidence to back up what's being presented. Be fair, logical, and deliberate.
Compare both sides, don’t just look for what supports management’s story, be equally open to opposing views. This helps avoid confirmation bias.
Build confidence in your findings challenging your initial views. If something feels off, dig deeper until you're comfortable with the answer.
Practice and reflect, don’t just assume. Discuss tricky cases, learn from real examples, and consciously think through the “what ifs.”
Watch for bias. We’re all prone to seeing what we expect. Recognising this helps you ask, “Could I be missing something?”

How Skepticism Helps Accountants Spot Red Flags

While the IAASB’s revised audit standards are aimed at auditors, the principles of skepticism apply directly to accountants, too, especially when:

You’re preparing financial statements
Clients or internal teams may push for aggressive assumptions on valuations, projections, or disclosures.
🚩Red flag: Management insists on best-case scenario cashflow forecasts
👉Your move: Ask for independent verification. Do the numbers align with market trends and actual performance?
You’re reviewing documentation
Whether it’s loan terms, supplier agreements, or lease contracts, documents may appear legit on the surface but raise questions on closer inspection.
🚩Red flag: A new lease pops up right before year-end, conveniently improving ratios
👉Your move: Confirm its origin, check board approvals, and question timing. Is this authentic, or strategic window dressing?
You’re answering to SARS
When preparing VAT or income tax submissions, the stakes are high. Submitting misleading data, even unintentionally, can lead to audits, penalties, or worse.
🚩Red flag: Client pressures you to classify questionable expenses as deductible
👉Your move: Don’t just comply, document your position, advise on risks, and walk away if the integrity line is crossed.
You’re overseeing or advising a business
Accountants are often the first to spot subtle shifts, declining margins, unusual journal entries, or inconsistent stories from departments.
🚩Red flag: Different people give conflicting info about stock levels or sales deals
👉Your move: Escalate it to management and ask more questions. See if it links to deeper issues like inventory fraud or revenue smoothing.
You’re using tech or data tools
Whether it’s Excel, accounting software, or analytics platforms, these tools can flag oddities. But it’s your judgment that turns insights into action.
🚩Red flag: An automated tool flags unexpected spikes in sales returns
👉Your move: Investigate the reasons. Is it seasonal, or hiding credit note manipulation?

Why This Matters for Accountants

You’re not “just” the numbers person. You’re the first line of defense against risk.

Professional skepticism helps you:

Protect clients or your company from financial misstatements
Avoid liability, especially in cases of fraud or tax errors
Enhance your value as a trusted advisor, not just a processor of numbers
Earn more respect and better fees, because risk-savvy accountants are in demand

And Why Now?

The IAASB’s revised standards raise the bar across the profession. Even if you're not signing off audits, you’re contributing to the financial picture. What you prepare—or approve—feeds into audit processes and investor decisions.

Being professionally skeptical isn’t just about compliance. It’s about professional survival and ethical leadership.

In Summary: Pause. Dig. Question.

If something doesn’t sit right, ask more questions. Trust your instincts. A healthy dose of skepticism can protect your clients, your company, and your reputation.

Skepticism isn’t just for auditors. It’s your edge as a smart, ethical accountant.

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