Document ID: chunk:federal_register_of_legislation:F2023C01119:body:0:p22
Version: federal_register_of_legislation:F2023C01119
Segment Type: other
Provision Reference: 
Character Range: 61958–65178

that immediately come to mind or are readily available than on those that are not.

           * Confirmation bias, which is a tendency to place more weight on information that corroborates an existing belief than information that contradicts or casts doubt on that belief.

           * Groupthink, which is a tendency to think or make decisions as a group that discourages creativity or individual responsibility.

           * Overconfidence bias, which is a tendency to overestimate one's own ability to make accurate assessments of risk or other judgements or decisions.

           * Anchoring bias, which is a tendency to use an initial piece of information as an anchor against which subsequent information is inadequately assessed.

           * Automation bias, which is a tendency to favour output generated from automated systems, even when human reasoning or contradictory information raises questions as to whether such output is reliable or fit for purpose.

A37.         Possible actions that the engagement team may take to mitigate impediments to the exercise of professional scepticism at the engagement level may include:

           * Remaining alert to changes in the nature or circumstances of the audit engagement that necessitate additional or different resources for the engagement, and requesting additional or different resources from those individuals within the firm responsible for allocating or assigning resources to the engagement.

           * Explicitly alerting the engagement team to instances or situations when vulnerability to unconscious or conscious auditor biases may be greater (e.g., areas involving greater judgement) and emphasising the importance of seeking advice from more experienced members of the engagement team in planning and performing audit procedures.

           * Changing the composition of the engagement team, for example, requesting that more experienced individuals with greater skills or knowledge or specific expertise are assigned to the engagement.

           * Involving more experienced members of the engagement team when dealing with members of management who are difficult or challenging to interact with.

           * Involving members of the engagement team with specialised skills and knowledge or an auditor's expert to assist the engagement team with complex or subjective areas of the audit.

           * Modifying the nature, timing and extent of direction, supervision or review by involving more experienced engagement team members, more in-person oversight on a more frequent basis or more in-depth reviews of certain working papers for:

                   + Complex or subjective areas of the audit;

                   + Areas that pose risks to achieving quality on the audit engagement;

                   + Areas with a fraud risk; and

                   + Identified or suspected non-compliance with laws or regulations.

           * Setting expectations for:

                   + Less experienced members of the engagement team to seek advice frequently and in a timely manner from more experienced engagement team members or the engagement partner; and

                   + More experienced members of the engagement