Discuss the concept of professional skepticism and its importance in audit. Why is it sometimes difficult for auditors to exercise appropriate levels of professional skepticism in practice? 3.A company has been making losses on its operations due to many factors such as competition, impairment of some of its non-current assets and losses incurred on derivatives in its hedging activities as well as problems of complying with many laws and regulations governing its operations. RequiredAs the audit manager in charge of the audit of this company, evaluate the areas in the audit of your client where the audit team members need to exercise a high level of professional skepticism.

Professional skepticism is defined as a questioning mindset, being aware of events that may signal a…

Answered: Discuss the concept of professional…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Discuss the concept of professional skepticism and its importance in audit.
Why is it sometimes difficult for auditors to exercise appropriate levels of professional skepticism in practice?

3.A company has been making losses on its operations due to many factors such as competition, impairment of some of its non-current assets and losses incurred on derivatives in its hedging activities as well as problems of complying with many laws and regulations governing its operations.
Required
As the audit manager in charge of the audit of this company, evaluate the areas in the audit of your client where the audit team members need to exercise a high level of professional skepticism.

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