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This Concept Means That the Auditors Should Not Automatically Assume

question 68

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This concept means that the auditors should not automatically assume that their clients are honest, but that they the auditors) must have a questioning mind and a persistent approach to evaluating evidence for possible misstatements.


Definitions:

Company

A legal entity formed by individuals, stockholders, or shareholders, with the purpose of operating for profit.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to fund day-to-day operations.

Company

An organized entity formed for the purpose of conducting business, wherein it can earn revenues, incur expenses, and operate with the aim of profit.

Inventory Turnover

A metric indicating the frequency at which a company's stock is sold and replenished within a specific timeframe.

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