Auditor's Need to Exhibit Professional Skepticism When Auditing a Client

question 49

Multiple Choice

Auditor's need to exhibit professional skepticism when auditing a client. This auditing standard is best expressed by which of the following?

• A) the auditor neither assumes dishonesty or honesty of management
• B) the auditor assumes dishonesty of management
• C) the auditor assumes honesty of management
• D) the auditor assumes management lacks integrity

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Definitions:

Premium Cost

The additional amount paid over the normal cost for something, often for insurance or for acquiring a financial instrument before maturity.

Internal Control

Systems and processes implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Unnumbered Checks

Unnumbered checks are checks that do not have a pre-printed sequential number, potentially raising security and tracking concerns within financial transactions.

Reference Source Documents

Original documents that provide evidence and details of business transactions, used for accounting and auditing purposes.