Chapter 2, Problem 37RSCQ

a.

To determine

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 situation of a company being not profitable and the reason behind the deficiency in internal control over disbursements.

b.

To determine

To identify:The situation of a company reporting significantly higher net income than its competitors.

c.

To determine

To identify:Thesituation of a company who is financially distressed and making unusual large payments for its debts.

d.

To determine

To identify:TheCompany is not having a certified CPA and is not able to generate reasonable amount of profits.