What does professional scepticism require from an auditor?
Correct answer: B. Maintaining a questioning mind when evaluating evidence
- A. Accepting management explanations without further work
- B. Maintaining a questioning mind when evaluating evidence
- C. Assuming that every management estimate is fraudulent
- D. Relying only on evidence obtained from outside parties
Explanation
Professional scepticism means maintaining a questioning mind and critically assessing audit evidence. It does not require assuming dishonesty, but it also prevents the auditor from accepting unsupported explanations uncritically.
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About Auditing
Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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