Critical Thinking in Auditing

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Critical thinking is seen as a mental framework that enables various practitioners to comprehend a situation and dissect it effectively to develop solutions using a cognitive approach. This approach is what assists every auditor to approach every audit case and problem with professional scepticism. Many people view the auditors methods as being unreasonable at critical times. They also view them as nit-picking methods that are not adequately instinctive. These people should understand that critical thinking is not necessarily an innate capability for auditors be it internal or external as well as other professionals. Instead, a key competency is acquired through ones experience. Even those with disciplined enquiry tactics and ethics in reasoning should understand this definition. Curiosity is key when one intends to obtain thinking skills. It is the basis of every other critical thinking skill one comes up with in the process of problem-solving. Critical thinkers do not fear to bring up statements that question underlying assumptions. Neither do they fear to put across suggestions that they think will come under great scrutiny and enquiry? In the Audit field, critical thinking mainly takes the form of questioning the effectiveness and relevance of a certain technique given its continued use in the past. This paper addresses an audit problem I once encountered and the tips we employed to assess and solve it.

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As a profession, auditing has committees and independent directors that play the crucial role of fostering the quality and credibility of audit practices. However, these committees do not become champions of the best audit processes without involving subsidiary teams within organizations to solve audit problems. Since ours was a corporate organization, we had to keep the companys audit procedures at par with capital market requirements. Taking care of the market needs can be a daunting task especially if there are several demands and preferences you have to address. However, the bigger challenge involved keeping the company at the same level with its governing body. Corporate governance evolves over time. Many auditors have gained unexpected experience while identifying and preventing present and future threats to the corporate business. Some of these include differences in cultural and business practices.

The truth is there has never been a perfect governance regime throughout time. For instance, people never give up on the need for better transport, news or social services. If the suppliers of these products and services do not keep up with growing trends such as technology and consumer tastes, they eventually fall altogether. Nevertheless, there are several benefits auditors stand to gain from critical thinking. They include being able to arrive at a substantial and comprehensive conclusion and identifying useful recommendations that trigger the least review notes from managers and others in charge. We, therefore, needed to come up with a convenient approach to handling our dire situation. Convenient as regards to both the audit firms and the consumer. The approach was however not complete without a series of thinking skills that included:

- Observing closely the information relayed from all angles to establish whether the different perceptions supported our conclusions or affected them in any way. In addition, this information would aid in identifying new and unanswered questions.

- Looking at every single amount of data collected so as to establish what significant effect any pieces might have on conclusions to be drawn.

- Thinking optimistically to record all advantages that result from the decision made. We were also of the view that every opportunity that presented itself in the decision making procedure was to be specially spotted to evaluate the value that may arise from it.

- After making the decision, on a mutual basis, we would assess it critically and cautiously applying any form of defence to identify any weakness. This approach was necessary since weaknesses in decision making have been proven to emerge naturally among most auditors. To enable a spirited discussion, we allowed the consideration of any contingency that could counter the decision.

- Looking at the challenge using intuition, emotional and gut reaction tactics.

- Trying to think and imagine how the rest would react emotionally and logically to the decision made.

- Trying to anticipate how those who do not understand our reasoning would respond both in terms of the decision made and risks assessed.

Critical thinking is as important in the problem-solving process as it is in the auditor-in-charge level. It identifies the issues that need to be reported within the audit scope. It also serves its purpose at the managerial level when aiding those in charge in making staffing decisions, determining developmental budgets, annual audit plans, and allocation of needed time on each audit exercise.

The audit report may be the physical outcome of an audit exercise; however, the degree of critical thinking employed in its generation defines its quality. Critical thinking has become vital in all levels of audit processes. As a result, the audit executives have set culture and tones that evaluate and reward the competency of audit teams.

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