The Undeniable Value of Professional Skepticism: Guest Post From Terry Starbucker

“Terry Starbucker” is the nom de plume of my friend Terry, a service company executive (and CPA) with nearly 28 years in the business world. He writes about leadership and personal development on his blog, Ramblings From a Glass Half Full. He is also active in the social media community as a co-founder of SOBCon, one of the premier annual gatherings of online practitioners.

You can also follow Terry on Twitter (@starbucker)

Here’s an excerpt:

I have this natural tendency to want to trust everybody.   I know that’s not good, so I have to fight that tendency, especially in the business world.   Fortunately, I started my career as a CPA and auditor, and I learned about this thing called “Professional Skepticism“.

If you look that up in the accounting standards book, it will tell you that   “(auditors) need to overcome some natural tendencies—such as overreliance on client representations—and biases and approach the audit with a skeptical attitude and questioning mind.  Also essential: The auditor must set aside past relationships and not assume that all clients are honest.

For the rest of this post, please visit Terry’s blog, Ramblings From a Glass Half Full.

If you’re really interested in this topic, you can come to hear me speak in Atlanta on May 14th at the Fourth Annual Fraud and Forensic Accounting Education Conference.  My topic will be,  The Skeptical Professional.

5 replies
  1. David
    David says:

    I think the old saying goes “figures don’t lie but liars do figure.”

    There is a lot of focus on ethics and there should be. But a big part of the problem is that auditors are afraid to offend their clients by asking tough questions. And to be effective, they can’t be.

  2. Oversight for the Better
    Oversight for the Better says:

    How’s this for a possible solution to the problem that being social animals causes auditors? Since we don’t have the stomachs from a personal or business perspective to deal honestly with our clients, any time someone within our audit team raises a difficult question, the facts are assembled and sent to the Truth Squad. If the Truth Squad sees a problem and recommends changes, or no clean audit opinion, that determination is taken back to the client and we, the dear auditors, shake our heads and say, we’re so sorry. We want to go your way, but the Truth Squad won’t let us. And, just when the client is about to fire you, you remind them that they will have to face the Truth Squad no matter which firm they choose.

    The Truth Squad can be the tough guy, because they will have no idea who the client is, just the facts. What makes the difference is the complete lack of human to human contact in the process. The minute you slip that in, every semblance of independence goes right out the window. It’s the pheromones and that subtle turn of the head or sweet smile or glaring intimidation that undermines any intention to fulfill our duties.

    Okay, so it will never work, but why not float it?

  3. Truth squad, eh?
    Truth squad, eh? says:

    Not a bad thought…one would think the PCAOB and the SEC serve well as the “Truth Squad”, but we all know how that has gone over the past several years…

  4. ex-DT
    ex-DT says:

    In theory the firms do have a truth squad internally with their various internal technical consulting resources, however if the audit team doesn’t want to ask the difficult questions then no-one would ever know…..

  5. fxp
    fxp says:

    The truth is the client, often ex-auditors, know how to say things to disarm auditors in their review. I’ve seen juniors intimidated by a Controller from asking the tough questions. It seems that this behavior should put the professional on notice that something more needs to be found.

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