Which of the Following Is a True Statement Regarding Professional

question 23

Multiple Choice

Which of the following is a true statement regarding professional skepticism?

• A) Auditors reject most potential clients perceived as lacking honesty and integrity.
• B) If the auditor has past experience with a client, they can assume the client is honest.
• C) Material frauds occur in most of the audits of financial statements.
• D) Professional skepticism is required only during the planning phase.

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Definitions:

ERG Theory

A theory of motivation created by Clayton Alderfer, which organizes human needs into three distinct groups: Existence, Relatedness, and Growth.

Psychological Growth

The development of an individual's mental and emotional capacities throughout their life.

Total Revenue

The overall amount of money generated by a business or organization from its activities, without deducting any expenses.

Competitive Industry

An industry characterized by a large number of firms competing with each other, leading to efficient outcomes and low prices.