The effective and consistent application of professional judgement is fundamental to high-quality audit and it’s an area where auditors are constantly striving to enhance their skills. To assist individual auditors and firms to enhance audit quality, ICAEW has developed a practical e-learning programme on Applying Professional Judgment in Audit. 

Free to members, the research-based programme emerged from work between ICAEW and Sir Andrew Likierman, Professor of Management Practice in Accounting and former Dean of the London Business School and an expert on judgement; and it reflects growing interest in professional judgement by regulators, such as the UK’s Financial Reporting Council (FRC).

In 2022, the FRC issued non-prescriptive Professional Judgement Guidance for auditors, along with support material sharing illustrative examples and expectations of auditors, and introducing the FRC’s principles-based Professional Judgement Framework. This topic is covered by ICAEW’s e-learning programme, which comprises four modules.

• Module 1: The raw material of judgement – exploring elements of the professional judgement process and how to use them.
• Module 2: The process of judgement – influences on professional judgement and the exercise of critical thinking and objectivity.
• Module 3: the FRC Professional Judgement Framework – putting the guidance into context and understanding the FRC’s expectations. 
• Module 4: Improving your own professional judgement – an opportunity for auditors to test and stretch their skills.

Completing the elearning programme on Applying Professional Judgement in Audit can, for example, help auditors to:

• differentiate between professional judgement and professional scepticism;
• identify who and what to trust in making a judgement;
• resolve or mitigate potential issues when employing knowledge and experience in judgement making;
• use techniques to improve their own ‘awareness’ (taking in what they see and what people say) to enhance their employment of judgement;
• better understand how to use a professional judgement framework as part of decision-making in audit and other assurance engagements;
• ground course concepts in real life using case studies created for and by auditors; and
• reinforce professional judgement as a cornerstone of the audit process and credibility in the audit profession.

Professional judgement is significant throughout every aspect of audit and other types of assurance engagement, and the ICAEW e-learning programme offers opportunities for auditors at all stages of their career to sharpen their understanding and application of professional judgement. 

“Judgement isn’t something you can take for granted,” stresses Likierman, because it can get worse if you become overconfident or complacent. Nor is it something that you’re born with and either have or don’t have. “All these elements of judgement are capable of improvement.” 

Likierman hopes that the course will provide members with an interesting and useful frame of reference for how to approach judgement in audit and assurance and assist with some of the difficult choices that professional auditors are required to make.

“Auditors are faced with many complex judgements, such as around going concern or impairment,” he says. “It’s important to have a better chance of making a choice that stands up – not just in terms of the way in which you feel about it, but how colleagues understand it and how the regulator views it. I hope all those outcomes will be helped by this course.”

The e-learning programme Applying Professional Judgement in Audit is free to ICAEW members and costs non-members £260 + VAT.

Learn more about the programme