Question: The two components of professional skepticism are a questioning mind
The two components of professional skepticism are a questioning mind and a critical assessment of the audit evidence. How do these components help an auditor distinguish an unintentional misstatement from an intentional (fraudulent) misstatement?
Answer to relevant QuestionsThe chapter vignette on page 350 highlights the fraud at Koss Corporation where the principal accounting officer, Sujata (“Sue”) Sachdeva, embezzled approximately $31 million over 5 years to fund her lavish lifestyle. ...The following are audit procedures from different transaction cycles:1. Examine sales invoices for evidence of internal verification of prices, quantities, and extensions.2. Select items from the client’s perpetual ...The following are common tests of details of balances or analytical procedures for the audit of accounts receivable:1. Request 30 positive and 50 negative confirmations of accounts receivable.2. Select 10 customer accounts ...You are auditing the financial statements of Austin Software Company, which is a fast-growing software development company. As part of the company’s strategy, management has been aggressively pursuing acquisitions of other ...Items 1 through 6 are questions typically found in a standard internal control questionnaire used by auditors to obtain an understanding of internal control for notes payable. In using the questionnaire for a client, a ...
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