Why Every Accountant Needs to Be a Skeptic

A healthy dose of skepticism is key to an accountant’s success. Do you have it? By GEORGE A HEYMAN, CPA, CGMA | Winter 2018



Whether doing audit, tax, consulting, or industry work, due professional care is needed for maintaining your accounting independence, that state of mind where you can perform your services without being impacted by influences that compromise your professional judgement. A healthy dose of skepticism and sound professional judgement are keystones in every successful accountant’s career.

Skepticism is to doubt the truth. It’s a safeguard that helps us ensure due professional care when deciding which auditing procedures, accounting principles, tax positions, or consulting advice would be best in any given situation. This all starts with knowledge. As accountants, we have earned the respected title of the “most trusted business advisor,” which means we have a responsibility to maintain the greatest amounts of knowledge in our respective fields as we can. In turn, when we look at information, the first question should be, “Does it make sense given what we know?” The idea is to always look for anomalies and anything that doesn’t fit the situation.

That said, maintaining professional skepticism does not mean implying nobody can be trusted, questioning others in ways that says you do not believe them, or getting in someone’s face about a situation. Skepticism is about asking the right questions — in an open-ended way — to get the right answers. Here are six principles that can help you develop and maintain your professional skepticism.

1. Ask the right questions. Voltaire said that we should judge a man by his questions rather than by his answers. In that spirit, avoid being confrontational by asking open-ended questions. Once asked, give the person time to think before answering. Remember to truly listen and, if needed, ask follow-up questions.

2. Encourage discussions of differing opinions. This is important anytime there’s more than one possible answer or outcome. For example, the question may be which tax position to take or which auditing procedure would be most effective and efficient. You could also face a situation in which your client wants to account for something one way when there’s a better alternative.

3. Question the status quo. We are accountable to status quos set by organizations like the IRS, FASB, and GASB, etc. But many changes in guidelines from these organizations have come from accountants rightly questioning and challenging them on certain issues.

4. Maintain a veil of ignorance. In the essence of John Rawls, for us this means rendering our personal considerations obsolete. So, even if you know or like a person, for example, you must focus on the facts of the situation to make your decision and maintain your independence. There are cases where CFOs didn’t question certain journal entries made by their CEOs because they blindly trusted them. Guess who also went to jail when the CEO’s journal entries amounted to fraud? The CFO.

5. Make sure you have everything. People can influence you by omission as well as commission. By leaving out a detail, your decision can be changed. Always ask yourself if you’ve received enough information and if anything else needs to be addressed.

6. Notice surroundings and behaviors. Always follow up inquiry with observation. Watch for body language that could give clues to the truth or a misrepresentation.

Despite the negative connotations surrounding skepticism, there’s nothing bad about being a good skeptic — in fact, your career depends on it. Putting the steps above into practice will help you be a successful skeptic and, in turn, a successful accountant.