Professional Judgment
Professional judgment is a behavior that requires you to make decisions, analyses, or evaluations based on the knowledge, skills, training, or experience you possess, as an auditor, by the standards, laws, regulations, or principles of the applicable financial reporting framework in your country [Wikiaccounting].
Professional judgment is essential to the proper conduct of an audit. This is because the interpretation of relevant ethical requirements and the ISAs and the informed decisions required throughout the audit can only be made by applying relevant knowledge and experience to the facts and circumstances.
Professional judgment is necessary, particularly when making decisions about
-Materiality and audit risk
-The nature, timing, and extent of audit procedures used to meet the requirements of the ISAs and gather audit evidence.
-Evaluating whether sufficient appropriate audit evidence has been obtained to achieve the auditor's objectives.
-The evaluation of management’s judgments in applying the entity’s applicable financial reporting framework and accounting policies.
-The drawing of conclusions based on the audit evidence obtained, for example, assessing the reasonableness of the estimates made by the management in preparing the financial statements [Auditor Forum].
Professional Judgment In Auditing – What Is It? (Usages Included). Wikiaccounting. Retrieved from: https://www.wikiaccounting.com/professional-judgment-in-auditing/
Professional Judgement and Professional Skepticism. Auditor Forum. Retrieved from: http://auditor101.com/professional-judgement-skepticism/#:~:text=Professional%20Judgment%3A%20It%20means%20making,relevant%20training%2C%20knowledge%20and%20experience.