Developing Professional Scepticism by Dr Margaret Healy, Dr Brid Murphy, Dr Claire O’Sullivan Rochford and Prof Ray Donnelly

Developing Professional Scepticism: The Importance of On-the-Job Training
By Dr Margaret Healy, Dr Brid Murphy, Dr Claire O’Sullivan Rochford and Prof Ray Donnelly
In a landscape where the pace of change is accelerating, high levels of professional scepticism (PS) are demanded of competent professional auditors. But how, where and when can PS be developed? How best can professional accountancy bodies align the education and training of future accounting professionals? The findings of a recent research study carried out by Dr Margaret Healy, Dr Brid Murphy, Dr Claire O’Sullivan Rochford and Prof Ray Donnelly suggest that enhanced PS levels overall, as well as for specific PS dimensions, are substantively developed by ‘on-the-job’ experience.
Admission to, and continuing certification with, global professional accounting bodies requires members to achieve appropriate competency standards. PS is acknowledged as fundamental, alongside integrity, objectivity and independence (CPA Ireland, 2023). High profile failures in the audit process and questioning of the quality of audit have damaged public confidence in auditors and public concerns have been chronicled, both nationally and internationally.

The UK Brydon Report (2019) argues for focused efforts in both formal education and informal development to appropriately prepare the next generation of auditors for professional practice. However, efforts to ‘teach’ PS are not always successful. A study of Irish third level students (Healy, Murphy, O’Sullivan Rochford and Donnelly, Accountancy Plus, 2022) found individual student’s PS levels remained stable before and after completion of an audit module and there was no evidence that an educational intervention designed to enhance a student’s audit-related judgement influenced PS levels.

In practice, the ultimate outcome of an audit engagement is an expression of the auditor’s opinion, which can only be issued after any uncertainty or doubt is allayed. To facilitate the expression of such an opinion requires the exercise of professional judgement and appropriate scepticism in considering audit evidence in the light of accounting and auditing standards. This suggests that the experience is vital.

Zoomed in photograph perspective of people sitting at their computers in an office space with numerous white lightbulbs hanging above them
Significant learning can accrue through immersion in practice as well as via more planned knowledge-gathering, i.e., professionals effectively learn experientially throughout their professional lives.

Learning from discrete and/or cumulative experiences is enhanced when they are later considered and reflected upon. The International Accounting Education Standards Board (IAESB, 2019) recently incorporated the ability to reflect as a core competence of an auditor in the exercise of PS and auditor judgement. Such deliberate reflection facilitates the conversion of tacit experience into more explicit knowledge.

In a recent study, a team of researchers from three third-level institutions investigate the PS levels of accountancy trainees in practice sitting CPA Ireland audit examinations and masters-level students reading specialist masters programmes at university.

PS levels are measured using a validated scale, generating both an overall PS level and levels for seven sub-dimensions (Autonomy, Reflection, Critical Reflection Self-Esteem, Search for Knowledge, Understanding, Interpersonal Understanding). The levels are then compared in total and across the dimensions. The findings highlight the relevance and importance of appropriate on the job training opportunities to trainees seeking to achieve audit qualifications.

Key findings
Respondent profiles

The student sample is drawn from two Irish universities, comprising students studying for the Master of Accounting qualification at one university in Dublin and one in Cork. The accountancy trainee sample is drawn from candidates enrolled in CPA Ireland’s Professional and Strategic Level auditing subjects.

66 masters-level students and 31 trainees participate in survey, comprising 52% females and 48% males. The students have very limited work experience while the trainees’ average years of experience is seven years.

Differences in overall PS levels

Findings show significant differences between the two groups of respondents, with the accounting trainees demonstrating significantly higher overall PS levels than the students. Significant differences between the two groups are also reported in relation to three of the sub-dimensions, Autonomy, Reflection and Critical Reflection.

‘Autonomy’ is the first stage of the training process for trainee auditors, whereby learning is constructed around a cycle of carrying out tasks following a prior year file, with understanding coming later, followed by any questioning of the process.

Autonomy effectively is the first stage of the reflection process.

‘Reflection’ in turn is the second stage of the reflection process and involves activity in which people recapture their experience and evaluate it, focusing particularly on problem solving.

Window photograph perspective of three women and a man talking at a table inside a building
‘Critical Reflection’ involves a deeper level of reflection, moving beyond problem solving towards problem posing. It may comprise questioning current behaviour, including preconceived assumptions, values, and espoused theories.

The remaining four sub-dimensions – Self-Esteem, Search for Knowledge, Understanding and Interpersonal Understanding – are importance aspects of PS, but did not highlight any significant differences between the student and trainee groups.

Differences based on level of experience

Findings highlight that experience plays a significant role in relation to PS development. As trainees gain experience, their learning increases, and thereby augments their PS levels. Interestingly, the type of experience is less relevant i.e., the results suggest that specialist audit and other experience have the same impact on PS levels

Differences based on gender

While no significant differences are found between male and female respondents’ overall levels, significant differences are found for two sub-dimensions, Understanding and Reflection. These differences are significant within the trainee sample, but not the student sample.

Implications for Trainees

Trainees should not underestimate the value of their training experiences. The competences and capabilities acquired, developed and refined form the bedrock of future professional practice. On-going active reflection on this throughout the training period forms more than a basis for meeting the competence requirements for admission to associate membership.

Our research findings suggest PS and professional practice develops through continuous experiences and through reflection on those experiences, i.e., they become more meaningful when they are accorded attention and reflected upon. An ability to reflect is a driver of development in professional competence as well as being a key component of learning from experience.

Implications for those training the Trainees

Trainees need active guidance and mentoring to fully realise the potential gains of their training experiences. Exposure to a range of professional practices and scenarios, in both simulated training contexts (for example, pre-audit planning; case-based real-world scenarios; virtual reality exercises) and client-facing roles, provide valuable inputs to augmenting trainee PS levels.

These gains are potentially optimised when combined with space and time for reflection before, during and after on the trainees’ experiences, facilitated by the guidance and direction of experienced professionals.

Implications for Professional Bodies

The findings of this study provide some insights and show that the development of PS is a multi-stage process, requiring a continuous process of learning, experience and engaging in reflection, and that there are important and complementary roles for all stakeholders.

University educators can provide key foundational elements to start the process e.g., fostering student engagement in critical thinking and building reflective capacity. Professional bodies and employers ensure trainees can gain exposure and experience, through on-the-job training, building autonomy, and paving the way for higher order reflection and critical reflection.

Concluding comment
The extent to which PS may be developed is under-explored and a key concern for professional bodies and educators considering alignment in accounting education and training. Given busy syllabi, with increasing competing demands on the professional curriculum, and changing workplace environments, it is important that all stakeholders engage in dialogue in order to focus on what best supports the development of PS when preparing auditors for professional practice. Such dialogue can help to ensure that professional bodies, employers, educators and regulators work together so that the purpose of audit is fulfilled and serves the public interest.

Brydon, D. (2019). Assess, Assure and Inform Improving Audit Quality and Effectiveness, Report of the Independent Review into the Quality and Effectiveness of Audit, UK. https://www.gov.uk/government/ publications/the-quality-andeffectiveness-of-audit-independentreview.

CPA Ireland (2023). Guide to In-Depth Competency Fields. https://www.cpaireland.ie/CPAIreland/media/Education-Training/Training/Guide-to-in-depth-competency-fields-Final.pdf

Healy, M., Murphy, B., O’Sullivan Rochford, C. and Donnelly, R. (2022). Can we teach professional scepticism? Accountancy Plus, March, pp.4-5.

International Accounting Education Standards Board (IAESB) (2019). Handbook of International Education Pronouncements. https://www.iaesb.org/ publications/2019-handbookinternational-education-standards.

Portrait headshot photograph of Dr Margaret Healy smiling
Dr Margaret Healy
Lecturer, Cork University Business School, University College Cork.
Portrait headshot photograph of Dr Brid Murphy grinning
Dr Brid Murphy
Associate Professor of Accounting, Dublin City University Business School, Dublin City University
Portrait headshot photograph of Dr Claire O'Sullivan Rochford smiling
Dr Claire O’Sullivan Rochford
Senior Lecturer/Head of Department, Department of Accounting and Information Systems, Munster Technological University, Cork Campus.
Portrait headshot photograph of Prof Ray Donnelly smiling
Prof Ray Donnelly
Professor of Accounting, Cork University Business School, University College Cork.