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REVISION of IES 4
Saleem Kharwa
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REVISION of IES 4
JUDGEMENT and SKEPTICISM
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TF has been grappling with the inclusion of skepticism and judgment since the inception
of the revision.
The words appeared in 2 places of the requirements section of the ED and the revision:
– together with public interest and
– in the learning outcomes
Board commented that the learning outcomes for professional skepticism and
professional judgment were too narrow.
Professional Judgment (PJ) and Professional Skepticism (PS) already defined by the
IAASB’s Int. Std. on Auditing – but these are in terms of audit engagements.
Board indicated judgment & skepticism went beyond audit for a professional accountant.
Literature search conducted by TF showed the following:
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REVISION of IES 4
JUDGEMENT and SKEPTICISM
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PS & PJ concepts largely used in the conduct of audits
Terms are viewed as connected and used interchangeably.
PS is identified as a subset of PJ.
ISA 200 definitions:
Professional judgment – The application of relevant training, knowledge and
experience, within the context provided by auditing, accounting and ethical standards, in
making informed decisions about the courses of action that are appropriate in the
circumstances of the audit engagement.
Professional skepticism – An attitude that includes a questioning mind, being alert to
conditions which may indicate possible misstatement due to error or fraud, and a critical
assessment of audit evidence.
PS and PJ key issues in and have learning outcomes in IES 8.
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REVISION of IES 4
JUDGEMENT and SKEPTICISM
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Alternative definitions to IES 8 and ISA 200 will cause confusion.
Board’s direction was to expand beyond audit.
TF recommends use skepticism and judgement at IPD level and PS and PJ be
addressed at IES8 level.
Dictionary definitions of skepticism and judgement are sufficient
Learning outcomes given prominence as follows:
Apply a skeptical mindset to critically assess financial information and other data
relevant to the role of a professional accountant.
Identify and evaluate reasonable alternatives to reach well reasoned conclusions based
on all relevant facts and circumstances available.
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REVISION of IES 4
ADOPTION of TABULAR FORMAT
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Learning outcomes originally in narrative format.
Board preferred consistent presentation.
TF Chairs and Secretaries agreed the tabular format to be used.
Based on this agreement the TF:
– Tabulated the existing outcomes into the learning outcomes column (except for
skepticism and judgment which were redrafted from para 10 dot point 8).
– Divided the existing learning outcomes into 3 competence areas based on areas of
expertise.
– Used the agreed Proficiency Levels of Learning Outcomes with the existing verbs in
the outcomes to determine the proficiency levels as follows:
 Skepticism and Judgment – Advanced
 Ethical principles – Intermediate
 Commitment to the public interest – Intermediate
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REVISION of IES 4
REPOSITIONING PUBLIC INTEREST WITHIN REQUIREMENT
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Board raised concerns about the way public interest was described.
Board suggested repositioning content elsewhere.
TF noted the following:
– Public interest specifically set in para 3 of Framework.
– New common EM to support the objective paragraph refers specifically to the public
interest (common across Standards).
– During the redraft the words “acting in an ethical manner” were omitted from the
framework requirement.
Task Force Recommendation:
• The framework requirement reverts to wording consistent with that used in ED and the
extant IES reflecting public interest.
• The draft requirement on public interest be repositioned in the EM.
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REVISION of IES 4
REPOSITIONING PUBLIC INTEREST WITHIN REQUIREMENT
 Paragraph 9
IFAC member bodies shall provide, through learning and development
activities, a framework of professional values, ethics, and attitudes for
aspiring professional accountants to exercise judgment and to act in
an ethical manner that is in the public interest.
 Paragraph A8
By establishing learning and development activities that cover
professional values, ethics, and attitudes, IFAC member bodies foster
a commitment to act in the public interest.
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REVISION of IES 4
CONCLUSION
• Page by page review
• Thank you
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