Professional judgement is not just a key part of being a CA (SA), it is the cornerstone of the career. More than simply ethics, true professional judgement encompasses every decision you will make in order to ensure that it is in the best interests of your company, your client and the wider industry.
Exercising sound judgement may, in fact, be the most important lesson you can learn as a trainee. “It’s defined as 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,” says Jana Lamprecht, Senior Auditing Lecturer at the University of the Free State.
As a future CA (SA), you will be held to the highest standard as a professional, so there is no better time for you to begin incorporating a thinking and decision making process which is thorough, unbiased, and which applies integrity and professional scepticism.
The make-up of many South Africa audit teams is tiered, which means that much of the detailed work will likely be completed by you as a trainee. This means you will need to make decisions which require professional judgement: determining materiality and audit risk, determining the nature, timing and extent of audit procedures used to meet the requirements of the International Standards on Auditing (ISAs) and gathering audit evidence, evaluating whether sufficient appropriate audit evidence has been obtained, evaluating management’s judgements in applying the entity’s applicable financial reporting framework and drawing conclusions based on the audit evidence obtained.
As such, Lamprecht explains, it’s of utmost importance that the audit partner can rely on the evidence gathered by each one of the audit team members – including trainees – in order to express an audit opinion. “Audit trainees therefore need to realise that developing their professional judgement is just as important as developing other technical and soft skills.”
An audit team should collectively have the appropriate competence and capabilities to perform the engagement. The ability to apply professional judgement is one of the criteria audit firms use to decide which staff to assign to an audit team and to determine the level of supervision required.
If a trainee or team member lacks professional judgement, more guidance and supervision will be provided on the work of that individual. This process assist individuals to develop their professional judgement without the audit firm exposing themselves to engagement risk. “Trainees should therefore see the guidance and supervision of senior staff as a learning experience and make sure they get the most out of it to not only develop their technical skills but also their professional judgement,” she concludes.
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