Document ID: chunk:federal_register_of_legislation:F2025L00107:front:0:p72
Version: federal_register_of_legislation:F2025L00107
Segment Type: other
Provision Reference: 
Character Range: 238688–241973

intended to be used as evidence.

           * Circumstances that suggest the need for procedures in addition to those required by relevant ASSAs.

           * Conditions that may indicate likely misstatement.

           * Conditions that may indicate possible fraud.

 1.          Professional scepticism is necessary for the critical assessment of evidence. This includes questioning inconsistent evidence and the reliability of responses to enquiries and information intended to be used as evidence. It also includes consideration of the sufficiency and appropriateness of evidence obtained in the light of the circumstances. Maintaining professional scepticism throughout the engagement is necessary if the practitioner is, for example, to reduce the risks of:

           * Overlooking unusual circumstances.

           * Over-generalising when drawing conclusions from observations.

           * Using inappropriate assumptions in determining the nature, timing and extent of the procedures, and evaluating the results thereof.

 1.          Unless the engagement involves assurance about whether documents are genuine, the practitioner may accept records and documents as genuine unless the practitioner has reason to believe the contrary. Nevertheless, the practitioner is required by paragraph 90 to consider the reliability of information intended to be used as evidence.

 2.          The practitioner cannot be expected to disregard past experience of the honesty and integrity of those who provide evidence. Nevertheless, a belief that those who provide evidence are honest and have integrity does not relieve the practitioner of the need to maintain professional scepticism.

 3.          Impediments to the exercise of professional scepticism at the engagement level may include, but are not limited to:

           * Budget constraints, which may discourage the use of sufficiently experienced or technically qualified resources, including experts, when needed.

           * Tight deadlines, which may negatively affect the behaviour of those who perform the work as well as those who direct, supervise and review that work.

           * Lack of cooperation or undue pressures imposed by management, which may negatively affect the engagement team's ability to resolve complex or contentious issues.

           * Insufficient understanding of the entity and its environment, its system of internal control and the applicable criteria.

           * Difficulties in obtaining access to records, facilities, certain employees, customers, vendors or others, which may cause the engagement team to bias the selection of sources of evidence and seek evidence from sources that are more easily accessible.

           * Overreliance on automated tools and techniques, which may result in the engagement team not critically assessing evidence.

           * Circumstances when there is no one generally accepted way in which to measure or evaluate the sustainability matters and report the sustainability information, which may result in practitioners being less willing to question management's approach.

           * Complexity of the engagement. The larger, more complex and more diverse the entity (e.g., the greater its geographical spread, and the more dependent