Auditor Professional Skepticism Under Intense Regulatory Oversight

Abstract

This study examines the role of auditor professional skepticism in sustaining audit quality under conditions of intense regulatory oversight. Using a systematic literature review approach, the study synthesizes peer reviewed research on regulatory pressure, behavioral reinforcement mechanisms, firm level culture, and technological transformation in auditing. The findings indicate that regulatory inspections and enforcement mechanisms significantly influence auditors’ risk assessments and evidence evaluation strategies, encouraging more conservative and rigorous judgments. However, professional skepticism is not solely driven by external pressure. Internal organizational practices, including structured training and supportive learning environments, strengthen auditors’ critical thinking and questioning mindset. The review also reveals that technological advancements, such as data analytics and blockchain based procedures, reshape evidence processing and require heightened vigilance in interpreting system generated information. Overall, professional skepticism emerges as a dynamic capability shaped by regulatory intensity, institutional support, and digital innovation, serving as a strategic safeguard that enhances audit effectiveness and public trust.