Which Is the Essence of Professional Skepticism

question 70

Multiple Choice

Which is the essence of professional skepticism?

• A)The auditor has interviewed client management for any changes in the business and industry.
• B)The auditor has performed a critical evaluation of audit evidence.
• C)The auditor has reviewed prior-year working papers and permanent file documents.
• D)The auditor has taken a tour of a client's physical facilities,noting obvious inventory obsolescence or equipment maintenance issues.

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Definitions:

Intrinsic Value

The inherent worth of an asset, independent of its market value, often calculated through fundamental analysis.

Share Repurchase

The process by which a company buys back its own shares from the marketplace, reducing the amount of outstanding stock and often increasing the value of remaining shares.

Stockholder Wealth

The total value of an individual's or entity's ownership stake in a corporation, measured by the market value of the shares held.

Stock Dividend

A form of dividend payment made in additional shares of the issuing corporation, rather than in cash.