The Financial Reporting Council (FRC) has today published
comprehensive professional judgement guidance for auditors to improve how they exercise professional judgement.
Professional judgement is key to high quality audit, however the FRC regularly identifies poor professional judgement as one of the most significant issues affecting audit quality.
The new guidance includes a framework for making professional judgements and a series of illustrative examples. If applied widely, the guidance will improve audit quality by enhancing the consistency and quality of professional judgement exercised by auditors.
The guidance will be of particular use for auditors and central technical teams but will also have wider interest for those interested in audit quality, such as audit committee members and investors.