Because of the risk of material misstatement, an audit of financial statements in accordance
with generally accepted auditing standards should be planned and performed with an attitude of:

A. Objective judgment.
B. Independent integrity.
C. Professional skepticism.
D. Impartial conservatism.

Answer(s): C
Explanation:
Choice "c" is correct. The auditor should plan and perform the audit with an attitude of
professional skepticism. This attitude includes a questioning mind and a critical assessment of
audit evidence. Choices "a", "b", and "d" are incorrect. Objectivity, independence, integrity, and
impartiality are basic ethical characteristics and professional qualities embodied in the general
standards.
QUESTION: 11
Which of the following is not an example of the application of professional skepticism?

A. Designing additional auditing procedures to obtain more reliable evidence in support of a
particular financial statement assertion.
B. Obtaining corroboration of management's Explanations through consultation with a specialist.
C. Inquiring of prior year engagement personnel regarding their assessment of management's
honesty and integrity.
D. Using third party confirmations to provide support for management's representations.

Answer(s): C
Explanation:
Choice "c" is correct. The auditor should consider that fraud might occur regardless of any past
experience with the entity. An assessment of management's honesty and integrity performed
during the previous year would not necessarily be relevant to the current year's audit. Choice "a"
is incorrect. An auditor might apply professional skepticism by performing additional audit
procedures designed to improve the reliability of evidence. Choice "b" is incorrect. Corroborating
management's Explanations is an example of the application of professional skepticism, since
the auditor is obtaining additional support rather than simply accepting the Explanation as given.
Choice "d" is incorrect. Using third party confirmations to provide support for management's
representations is an example of the application of professional skepticism, since the auditor is
obtaining additional support rather than simply accepting the Explanation as given.
QUESTION: 12
Which of the following categories is included in generally accepted auditing standards?

A. Standards of review.
B. Standards of planning.
C. Standards of fieldwork.
D. Standards of evidence.

Answer(s): C
Explanation:

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