Professional skepticism is

Q: When faced with uncertainty there is a need to exercise prudence. Which of the following would be…

A: PRUDENCE IS USALLY SEEN AS A VIRTUE . HOWEVER , IT CAN BE EXCESSIVE IF IT HAS AN UNREASONABLE IMPACT…

Q: Compare and contrast the theory of rational expectation developed by professor limperg, mautz and…

A: The goal of this book is to introduce and talk about the structures that influence the   interest…

Q: Would immediate public disclosure of such vulnerabilities be a good best practice?

A: To begin with, immediately disclosing a weakness is a good practice since it allows users to protect…

Q: Why is it important to complement intuition with systematic study?

A: Organizational behaviour is the study of understanding how people behave within groups. The…

Q: What is the risk of Incorrect Rejection?

A: Risk of incorrect acceptance of internal control reliability and risk of incorrect acceptance of…

Q: Inquiry and observation are applicable to gather evidence about a policy or procedures that does not…

A: Solution : Concept Inquiry               Inquiry as process of audit means the process of seeking…

Q: For what does an auditor use professional skepticism?

A: Professional skepticism can be explained as the confirmation of information through inquiry, the…

Q: Which of the following concepts is least related to the standard of due care?a. Independence in…

A: In situations when there is a major issue and its analysis is technically relevant, auditing…

Q: What recommendations will you give to prevent fraud?

A: Fraud is an unethical activity performed against an organization's policy in order to take personal…

Q: Why would an auditor use observation to gather evidence? What are the strengths and weaknesses of…

A: solution : Why would an auditor use observation to gather evidence? What are the strengths and…

Q: Why can’t legal considerations resolve every ethicalquestion?

A: Legal standards are those standards that are set forth in governmental laws. Ethical standards are…

Q: What rules or policies should be developed to avoid ethical fraud issues?

A: Accounting Fraud:   Intentional manipulation of financial statement to create false financial heath…

Q: Why are auditors more concerned with the risk of incorrect acceptance than the risk of incorrect…

A: Definition:

Q: Explain the threats to professional skepticism that might influence audit judgment.

A: Audit: Audit is the process of verification of the compliance of the financial statements.

Q: The process of determining which risks to insure and which applicants to reject is known as

A: Given information The process of determining which risks to insure and which applicants to reject…

Q: Demonstrate your understanding of various factors related to the lack of professional skepticism.

A: In auditing practice and theory, professional skepticism is an important term. Almost all current…

Q: what are the conditions for classical immunization to be not effective?

A: Classical Immunization:- Classical immunization can be characterized as the formation of a fixed-pay…

Q: t an audito

A: The temptation to interpret data in a way that supports assumptions might seduce an audit and derail…

Q: What is a reasonableness test?

A: Reasonableness tests is an analytical procedure used to examine the validity of the accounting…

Q: Audit tests and fraud?

A: For any company auditor is appointed to give an opinion on the financial statements, whether they…

Q: Which of the following about materiality is NOT true? A. Information is material if, in determining…

A: materiality is a concepts that applies in a variety of context including accounting, reporting,…

Q: Explain the specific relationship between risk and reward and why this relationship must be true.

A: Risk refers to probability for loss of investment value by an investor whereas Reward refers to…

Q: Do you think the concept of materiality is incompatible with ethical behavior? Consider in your…

A: The concept of materiality implies that if the net effect of the transaction is low on the financial…

Q: How can an auditor reduce a client’s inherent risk?

A: Inherent risk is the risk of material misstatement assuming there are no related controls. Inherent…

Q: What does an auditor's assessment of Detection Risk determine?

A: Detection risk is a component of audit risk. Detection risk is the possibility that a material…

Q: What are the root cause of conservatism bias?

A: The root cause of Conservatism bias is a strong belief system. As investors, it is difficult to…

Q: What are the risks from subversive threats?

A: Taking illegal access over a firm internal system network by doing activity of surpassing the…

Q: What does Internal Control provide reasonable assurance for?

A: Internal Controls:   Internal controls are the controls established within an organization to check…

Q: what are the difference between Preventive Controls and Detective Controls?

A: Financial Reporting control activities are imposed on the accounting standard for the purpose of…

Q: What are self-interest threat, self-review, and advocacy threats? Give an example of each threat.

A: The integrity of the financial statements depends upon the independence of the auditor. It means…

Q: The concept of reasonable assurance recognizes that the cost of internal control should not exceed…

A: Internal control would seem to be a method created by an institution or university's governing…

Q: Describe moral hazard.

A: Moral hazard refers to circumstances in which an individual chooses to apply little or no effort, or…

Q: How are the sufficiency and appropriateness of evidence related to detection risk?

A: Audit Evidence:   The pieces of evidence provided by the audit team to prove their opinion with…

Q: How does the source of evidence affect its reliability?

A:

Q: What is Roll’s critique of CAPM tests?

A: Capital asset pricing model is a model that is used to estimate the expected return on an asset. In…

Q: What is underpricing? Why is it used? What evidence do we have to support the belief that…

A: Underpricing is a common term used in Initial public offering of shares of a private company which…

Q: threats

A: Ans. An auditor has to follow certain ethical standards like objectivity, integrity,…

Q: Are you able to differentiate between risks that are inherent and those that can be controlled?

A: Inherent risk- A material mis-statement that occurs due to error or due to omission  in the…

Q: Explain professional skepticism and why it is important for all auditors.

A: Auditing is the process of examination of financial records of the entity with a view to express an…