Read enough commentary from the Independent Regulatory Board for Auditors (IRBA) from the past few years and one phrase keeps surfacing: professional scepticism. It’s in press releases about rebuilding public trust, in the explanatory notes behind new competency requirements, and in commentary on the corporate collapses that put the profession under scrutiny in the first place.
That’s worth unpacking, because it reflects something specific about how South Africa’s audit regulator has recalibrated its approach since state capture, and it tells firms a fair amount about where the profession is actually trying to go next.
What Professional Scepticism Actually Means
In auditing standards terms, professional scepticism is a questioning mindset: staying alert to anything that might indicate a misstatement due to fraud or error, and critically assessing audit evidence rather than simply accepting management’s explanations at face value. It’s less a checklist item than a disposition: the difference between an auditor who takes a plausible answer and moves on, and one who asks what would have to be true for that answer to hold up.
It sounds obvious stated plainly. But it’s precisely the thing regulators and commentators pointed to when trying to explain how some of South Africa’s most damaging corporate failures made it past an audit sign-off in the first place.
Why State Capture Made This the Central Question
The years following state capture were brutal for the audit profession’s credibility. Auditors’ role in work connected to the Gupta family, became a defining case study in what happens when scepticism doesn’t hold. VBS Mutual Bank’s collapse added another: IRBA handed down a lifetime ban to the bank’s lead auditor in 2026, describing him as a “hazard” to the profession.
These weren’t cases where the rules didn’t exist. They were cases where, with hindsight, the questioning didn’t happen the way it should have.
The Structural Reform That Didn’t Survive Contact with the Courts
IRBA’s biggest attempt at a structural fix was mandatory audit firm rotation (MAFR) – a rule forcing public interest entities to change audit firms after ten years, aimed squarely at the kind of decades-long, overly comfortable client relationships that can dull scepticism over time. It took effect on 1 April 2023, after years of consultation.
Two months later, the Supreme Court of Appeal set it aside, ruling that IRBA had acted beyond the powers granted to it under the Auditing Profession Act when it introduced the rule. It was a significant setback because it showed how legally fragile a purely structural fix can be. Rules can be challenged, narrowed, or struck down. A profession-wide expectation of scepticism and sound judgment is a different kind of lever – harder to legislate cleanly, but also harder to undo in court.
Where This Is Heading: Scepticism Built into Competency, Not Just Conduct
IRBA’s proposed 2026 competency framework, the first major overhaul since 2013, introduces new technical skills in sustainability, technology, and cybersecurity, while also embedding what it calls ‘structured reasoning under uncertainty,’ professional scepticism, and evidence‑based, transparent decision‑making. Practice management (how audit firms actually run themselves day to day) has also been added to the professional competence domain, on the basis that audit quality isn’t just a technical skill; it’s the product of sound judgment and disciplined behaviour applied consistently.
In other words: rather than trying to engineer scepticism through structural rules alone, IRBA is trying to make it a defined, trainable, assessable competency, thus something built into how auditors qualify and practise, not just something firms are told to have more of after the fact.
Practical Implications for Firms
- This is a cultural signal, not just a compliance update. Firms that treat professional scepticism as a genuine practice, visible in how engagements are run, reviewed, and challenged internally, are aligned with where the regulator is heading.
- Quality control and internal challenge matter more than ever. With structural fixes like MAFR proving legally vulnerable, the profession’s credibility increasingly rests on what individual firms actually do day to day: robust review processes, genuine engagement partner accountability, and a culture where junior staff are expected to ask hard questions.
- This is a good story for firms to tell clients. Being able to speak to how your firm builds scepticism and judgment into its process positions a firm as engaged with where the profession is going.
- Expect this language to keep appearing. As the 2026 competency framework moves toward its April 2027 implementation, professional scepticism is likely to become an explicit, assessable part of how auditors are trained and evaluated.
Conclusion
Professional scepticism keeps coming up in South African audit reform because it’s the thing the profession’s biggest structural fix couldn’t quite reach, and the courts made that limitation explicit when they set MAFR aside. What’s left is a harder, slower project: building a questioning mindset into how auditors are trained, assessed, and expected to behave, rather than relying on rules about who they can audit and for how long. For firms, that’s less a regulatory box to tick than a genuine opportunity to show clients what real independence of thought actually looks like in practice.
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