The Requirement for an Attitude of Skepticism Means That the Auditor

question 15

Multiple Choice

The requirement for an attitude of skepticism means that the auditor should

• A)not be blind to evidence that suggests the documents,books,or records have been altered or are incorrect.
• B)plan and conduct the audit with an attitude of distrust in management.
• C)perform additional tests of controls to increase the probability of discovering fraud or errors.
• D)not consider management's explanation as evidence on any subject.

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Definitions:

Treasury Stock

A corporation’s own stock that has been issued and subsequently reacquired from shareholders by the corporation but not retired.

Investing Activity

Transactions involving the purchase or sale of long-term assets and investments, reflected in the cash flow statement of a company.

Operating Activities

Activities that relate to the primary operations of a company, such as selling goods and services, which generate revenue and expenses.

Fixed Assets

Long-term tangible assets used in the operations of a business, not expected to be converted to cash within a year.