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Prior research, such as that published by Hurtt (2010) and Nelson (2009) identifies the attitude of professional scepticism as a trait. Trait theory holds a view that behavioural traits are predispositions of biological origin, and they are therefore considered innate (McLeod, 2014; Mooradian et al, 2006). This means that trait scepticism is a tendency to behave in a certain way, and that the behaviour will manifest in a reasonably consistent way (McLeod, 2014). In the context of professional scepticism, this view is supported by Carpenter & Reimers (2013), who assert that scepticism is not readily susceptible to internal or external influence. As such, it could be expected to remain reasonably stable over time (McLeod, 2014; Peytcheva, 2014; Rose et al, 2010; Carpenter & Reimers, 2013; Hurtt, 2009). McLeod (2014) explains that “theories are sometimes referred to as psychometric theories, because of their emphasis on measuring personality by using psychometric tests.” Indeed, numerous studies have utilised trait methods to measure auditors’ scepticism relative to other auditors.

Hurtt (2010) developed a scale to measure professional scepticism in terms of a “relatively stable” trait (Hurtt, 2009, p. 150), which has been applied to numerous research projects5. The survey instrument addresses six characteristics of scepticism: “A questioning mind, suspension of judgment, [need to] search for knowledge, interpersonal understanding, self-esteem and autonomy” (Hurtt, 2010 p.151), and reflects a regulatory perspective of scepticism (Westermann et al, 2014).

5

For examples, see Rasso, 2015; Harding & Trotman, 2015; Peytcheva, 2014; Carpenter & Reimers, 2013.

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Another trait measurement tool previously used to measure auditor scepticism 6 is the Wrightsman Trust Scale (1991). Like scepticism, trust has been identified in the academic literature as a trait, or propensity, which differs between individuals, but remains relatively stable in individuals over time (Rotter, 1980; Chughtai & Buckley, 2008). Chughtai and Buckley (2008) distinguish the trust trait from a state of trust (see also Rotter, 1967; Mooradian et al, 2008). The trust trait is held to be an important determinant of the trust state (Chughtai & Buckley, 2008), and that state itself is variable across time and in different contexts, subject to external influences. In these ways, the study of trust resembles recent study of professional scepticism.

Further, Chughtai and Buckley (2008) describe a connection between trust and belief. Mooradian et al (2008) describe belief as an extreme of trust, with cynicism its corresponding opposite; akin to optimism and pessimism, respectively. These concepts are important to study of professional scepticism, because trust is a known threat to auditor independence, and the fundamental purpose of independence is to facilitate professional scepticism.

In the auditing context, exploring trust as a factor of scepticism illustrates how belief is relevant to the notion of scepticism by also relating to trust’s corresponding opposite (Shaub & Lawrence, 1996; Quadackers et al, 2014): disbelief, or presumptive doubt (Nelson, 2009; Van Peursem, 2010; Glover & Prawitt, 2014), which expects a degree of client dishonesty (Nelson, 2009; Quadackers et al, 2014; Bell, Peecher, and Solomon, 2005). Both extremes thereby involve some degree of ex ante auditor bias.

6

For examples, see Rose, 2007; Quadackers et al, 2014; Shaub and Lawrence 1996; Choo and Tan 2000; Rose, Rose & Dibben, 2010.

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The notion of trust as a substantial factor in auditors’ professional scepticism is supported by Luippold et al’s (2015) findings that auditors’ ability to identify earnings management is reduced by a propensity to be distracted by the client to focus on cleaner accounts. This suggests a siloed or myopic approach wherein management’s representations are adopted as helpful (trusted), rather than recognised as potential diversions from less-pleasant truth. Low trust scores are considered a signal of higher scepticism (Rose, 2007; Hurtt et al, 2013; Quadackers et al, 2014). The effect of significant trust, therefore, is similar to the effect of significant distrust (presumptive doubt) in that both represent some degree of bias.

Trust is an important and valued human trait that facilitates relationships, both personal and professional. However, extreme trust in an auditor-client relationship represents a familiarity threat to objectivity (APESB, 2013), and may result in auditors under-assessing risk, over-relying on management representations, failing to collect sufficient appropriate evidence (Glover & Prawitt, 2014), and/or failing to evaluate the veracity of the evidence collected. Trust is therefore a significant aspect of audit risk; and in excess, it can be considered a precursor to expressing an inappropriate opinion when financial statements are materially misstated.

Extreme distrust is also a threat to audit, in that gathering of too much evidence, and completion of unnecessary audit tasks are inefficiencies (Glover & Prawitt, 2014) that increase firm costs and potentially damage auditor-client relationships due to increases in time taken and billed cost of services (Trotman, 2006). This threat does not expose auditors to regulatory or civil actions, as the excessive-trust threat can, however it does attract criticism (Trotman, 2006) and it may be argued that there are many more workplace pressures on auditors that deter inefficiencies than there are to deter trust. Workplace pressures that affect both these (dis)trust extremes, and act as barriers to scepticism, are discussed in section 2.7, below.

Harding & Trotman (2015) differentiate orientations of scepticism to explore differences between judgments and actions (Nelson, 2009), with “outward orientation focused on the veracity of management representations versus inward orientation focused on the justification of audit conclusions reached including evidence relied on” (Harding & Trotman, 2015, p.2). Using Hurtt’s (2010) Trait Scepticism Scale, Harding & Trotman (2015) found no difference between treatment groups, meaning that although an outward orientation increases scepticism in actions, it does not appear to influence scepticism in judgments. This sticky outward orientation suggests that a position of (dis)trust in management assertions is not easily challenged, supporting the view that the scepticism trait is quite fixed (Cohen et al, 2014; Carpenter & Reimers, 2013; Hurtt, 2010).

Rasso (2015) and Harding & Trotman (2015) agree, having found that when both

aspects of scepticism are engaged, auditors utilise more broad and comprehensive audit procedures and focus on higher quality evidence. In other words, if scepticism trait, expresses as anything other than neutral (that is, as trust, distrust or presumptive doubt), that trait arguably represents an inherent auditor bias, requiring that other, more flexible, behaviours compensate in order to deliver an objective and appropriately risk-responsive audit.