Professional Scepticism Does Not Involve

question 63

Multiple Choice

Professional scepticism does not involve

• A) the professional requirement that all management representations be substantiated with supporting documentation.
• B) seeking independent evidence to corroborate information provided by their client
• C) being suspicious when evidence contradicts documents held by their client or enquiries made of client personnel
• D) none of the above

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Definitions:

Bottom-Up

An investment approach that focuses on the analysis of individual stocks and fundamental factors affecting a company, as opposed to market-wide trends.

Portfolio Construction

The process of selecting and managing a collection of investments to meet long-term financial goals and risk tolerance.

Securities

Instruments evidencing ownership in a public corporation, a creditor's claim against a corporation or government body via bonds, or ownership entitlements through option contracts.

Financial Intermediaries

Entities such as banks, insurance companies, and investment firms that facilitate transactions between savers and borrowers by channeling funds from those who save to those who need to borrow.