KPMG CHAPTER 2

(Select the best answer for the multiple choice questions)

1. What are the five steps in the judgment process?

2.What are two common judgment traps?

3. Within an auditing context, what is professional judgment?

a. Professional judgment is the process of using relevant training, knowledge, and experience to reach a decision or draw a conclusion in evaluating evidence, estimating probabilities, or selecting between options.

b. Professional judgment is professional skepticism, which is an attitude that includes a questioning mind and a critical assessment of audit evidence.

c. Professional judgment is the application of ones experience to make a judgment in the absence of supporting evidence, based on the facts and circumstances of the audit engagement. d. Professional judgment is the construction of a logical justification to support an outcome or conclusion that is otherwise not supported by the available evidence.

4.Which of the following best describes the relationship between professional skepticism and professional judgment?

a. Professional skepticism is an attitude that includes a questioning mind and a critical assessment of audit evidence that is separate and apart from the process of exercising professional judgment.

b. Professional skepticism is an attitude that includes a questioning mind and a critical assessment of audit evidence that is part of the process in forming professional judgments.

c. Professional skepticism is synonymous with professional judgment.

d. There is no relationship between professional skepticism and professional judgment.

5.Which of the following best describes a judgment trigger?

a. An alternative stated in terms of a judgment objective

b. A technique for making effective judgments quickly

c. An issue/problem stated in terms of a particular alternative

d. A technique for more effectively evaluating anothers judgment