a.
Introduction:Professional skepticism can be explained as the confirmation of information through inquiry, the significant evaluation of the shreds of evidence obtained and focusing more on the inconsistencies.
To explain:The term professional skepticism.
b.
Introduction:Professional skepticism can be explained as the confirmation of information through inquiry, the significant evaluation of the shreds of evidence obtained and focusing more on the inconsistencies.
To identify:The reason why professional skepticism is helpful in frauds detection.
c.
Introduction:Professional skepticism can be explained as the confirmation of information through inquiry, the significant evaluation of the shreds of evidence obtained and focusing more on the inconsistencies.
To identify:The key behaviors that are necessary for professional skepticism.
d.
Introduction:Professional skepticism can be explained as the confirmation of information through inquiry, the significant evaluation of the shreds of evidence obtained and focusing more on the inconsistencies.
To identify:The difficulties for auditors to exercise professional skepticism.
e.
Introduction:Professional skepticism can be explained as the confirmation of information through inquiry, the significant evaluation of the shreds of evidence obtained and focusing more on the inconsistencies.
To identify: The characteristics and behaviors of the client companies to examine the authenticity in evidences provided by them.
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Auditing: A Risk Based-Approach to Conducting a Quality Audit
- Why is professional skepticism important when completing an audit? Please explain.arrow_forwardPractice question: In the context of auditing, having competent technical abilities and skills as an accountant is more important than ensuring auditor independence and understanding the procedures to overcome threats to independence. Do you agree with this statement? Why or why not? Use examples to facilitate your explanation.arrow_forwardProfessional skepticism is a. An attitude that includes a questioning mind. b. The auditor's application of relevant training, knowledge and experience. c. One of the professional code of ethics. d. Not necessary in auditing of the entity.arrow_forward
- KPMG is the auditing firm for Tech Corporation, a listed computer software company. The audit team assigned to perform the audit includes an Audit Manager, a Senior Auditor and three Audit Assistants. No member of the team has updated their knowledge or experience on IT or the business processes of an IT company. Based on the given scenario answer the following question numbers 29, 30 and 31: What is the appropriate course of action in the given situation? O a. KPMG should file for bankruptcy and close their auditing firm O b. KPMG should place team members who has updated knowledge and skills in IT business processes O c. KPMG should file a complaint against Tech Corporation O d. KPMG should complete the audit engagement with the current audit teamarrow_forward1: What problems do you see when an auditor relies extensively on management’s representations on the financial statements? 2: Do you believe that a CPA should be able to advertise? What guidelines would you recommend? Are there any areas you believe should be avoided?arrow_forwardwhat is the importance of ethical conduct for auditorsarrow_forward
- Hi there, Need help with questions: Determine why it is important to have auditing standards. Specifically, why are ethics important to the auditing profession?Explain why independence is such an important requirement for auditors. Who gets hurt when accountants and auditors fail to live up to high ethical standards?arrow_forwardTRUE OR FALSE. AUDITING 1. Financial statement users need to have an understanding of both the accounting and audit functions in order to better appreciate the assurance provided by an independent auditor on the fairness of the financial statements 2. The practitioner can accept an engagement if preliminary knowledge of the engagement circumstances indicate that ethical requirements regarding professional competence may not be satisfied 3. Professional competence can be satisfied by the practitioner using the work of persons from other professional disciplines referred to as experts 4. The practitioner plans and performs an assurance engagement using his professional judgment to obtain sufficient appropriate evidence about whether the subject matter information is free from material misstatement.arrow_forwardwhich of the following would be inappraited for an auditor to asek a client when exhibiting an apprate level of professional skepticism while completing an audit procedure related to the internal control system? a) what happens when a key emoployee goes on vacation? b) what can goes wrong in this peocess? c) what else is important to know abount process?arrow_forward
- The audit firm is acting as an expert witness directly for the audit client. What type of threat to independence might this create? Intimidation Self-interest Advocacy Familiarity.arrow_forwardWhat is in the nature of work of an auditor that puts his or her safety at risk? Answer in your own wordsarrow_forwardIdentify how each of the following statements relates to the performance principle by considering which element(s) of the principle are related to that statement. (A statement may be related to more than one element.) Use the following elements in providing your response: Reasonable assurance • Planning and supervision • Materiality ⚫ Risk assessment • Audit evidence a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements. b. Obtaining an understanding of the client's business and industry. c. Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. d. Obtaining confirmations from the client's customers as to the ending balances in accounts receivable. e. Preparing a written audit plan. f. Designing audit procedures to identify misstatements that would have a significant effect on financial statement users' decisions. g. Considering the likelihood that the account balance contains a material…arrow_forward
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