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Regional Audit Conference 2011

“Professional Scepticism: raising the bar!”

The Meydan Grandstand

22nd and 23rd November 2011, Dubai, UAE

Professional Scepticism and the Public Interest: Who does

the auditor serve?

Presented by

DR. OUSSAMA TABBARA, DBA, CPA Founder, Chairman and Managing Director ,

USAMAH TABBARAH & CO - NEXIA INTERNATIONAL

CERTIFIED PUBLIC ACCOUNTANTS

Dubai, United Arab Emirates

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Professional Scepticism and the Public Interest: Who does the auditor serve?

Professional Skepticism and Professional

Judgment: surely, both complement each

other in auditor’s work; both are required

to conduct the assurance engagements

properly. Though two separate

requirements, they are different in their

meaning and in their application.

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Professional Scepticism and the Public Interest: Who does the auditor serve?

In summary, professional skepticism does not mean placing a doubt on the honesty of the Management. If an auditor in the past has

found management personnel to be honest, then in a new [re-engagement] assignment

he should be mindful of that. However, honest management does not release the auditor from being skeptic in his attitude.

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Professional Scepticism and the Public Interest: Who does the auditor serve?

. A public accountant’s services are privately offered, privately contracted, and privately compensated. So one is prompted to ask where is the Public

Interest? Two separate issues could be identified, namely, [a] what the public

interest is and [b] what acts in the public interest from the perspective of the accountancy profession is involved.

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Professional Scepticism and the Public Interest: Who does the auditor serve?

The deeper element of public benefit is tied to

the notion of financial discipline. Self-

sustaining activities of an enterprise produce

profits: those that are not self-sustaining

eventually are abandoned. Therefore, the

continuation of self-sustaining activities of

enterprises contributes to the overall growth

in an economy

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Professional Scepticism and the Public Interest: Who does the auditor serve?

.

Financial needs across corporate entities

vary in terms of size, timing, risks and the

source of funds. Innovations that provide

this variety bring about complexity, which in

turn leads to opaqueness, causing a lack of

transparency and a difficulty of obtaining a

clear understanding.

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Professional Scepticism and the Public Interest: Who does the auditor serve?

Generally, investors easily understand a traditional share/bond trade. They have

difficulty perceiving the way how, for example, Collateralized Debt Obligations [CDOs], Credit Default Swap [CDSs] and Special Purpose Vehicles [SPVs] work, even if these innovative financial service

products were transparent in terms of product-content reference and performance

numbers.

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Professional Scepticism and the Public Interest: Who does the auditor serve?

Professional judgment is a skill that an auditor acquires over a period of time and only after acquisition of such skill can he/she apply professional judgment. The auditor acquires this skill by obtaining relevant training, skill, and experience. Accordingly, an auditor is expected to have acquired professional judgment whose training, knowledge and experience has enabled him/her to gain such competency level that allows him/her to achieve reasonable judgments in given circumstances.

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Professional Scepticism and the Public Interest: Who does the auditor serve?

The accounting profession has a responsibility to

protect certain “interests” of society, such as:

the soundness of financial reporting;

the comparability of financial information across

borders;

fiscal prudence in public expenditures; and

contributions that accountants make to corporate

governance and organisational performance.

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Professional Scepticism and the Public Interest: Who does the auditor serve?

Dr. Oussama established his professional accounting practices in Lebanon in 1962, and in Saudi Arabia on Registration No. 1 in 1976; in UAE and Oman in 2006; in Iraq in 2009; in Qatar and Syria in 2010. Oussama was a Director of Nexia International and the Chairman of Nexia Middle East and Africa Region [Nexia MEA], encompassing 28 countries, for more than 22 years from 1989. He is a member of the United Nations Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting. He is also a member of two groups of accounting standard-setters from around the world, the National Standard Setters [NSS] and the World Standard Setters [WSS]. Oussama has been a member of these groups since their inception.

Nexia International, a worldwide network of legally independent auditors, business advisors and consultants, with over 20,600 staff in some 500 offices serving clients in over 105 countries, had 2010 revenues exceeding USD 2.1 billion. World ranking No. 10.

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Professional Scepticism and the Public Interest: Who does the auditor serve?

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If you have any enquiries kindly call or email as follows: If you have any enquiries kindly call or email as follows:

DR. OUSSAMA TABBARA, DBA, CPADR. OUSSAMA TABBARA, DBA, CPA

Email Email otabbara@utcnexia.comotabbara@utcnexia.com

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