Chapter 7, Problem 19RQSC

a)

To determine

Introduction: Potential risk is the risk which is an expected in an action by the Auditor. This risk is the damage factor to the genuineness of the operations of a client.

To Explain:The potential risk areas and explanation for these risk areas and the description of potential risk areas affecting the audit engagement.

b)

To determine

Introduction: Potential Skepticism is the alertness factor of the working style of an Auditor who is prepared to handle any probable misstatement during the course of audit.

To Explain:The data which compels the auditor to use professionalism level while exercising in audit.