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    Question

    __________ refers to the attitude that includes a

    questioning mind and a critical assessment of audit evidence. Refer to the following information to answer the next 4 questions (Q23 to Q26) Audit is the examination or inspection of various books of accounts by an auditor followed by physical checking of inventory to make sure that all departments are following documented system of recording transactions. It is done to ascertain the accuracy of financial statements provided by the organisation. Audit can be done internally by employees or heads of a particular department and externally by an outside firm or an independent auditor. The idea is to check and verify the accounts by an independent authority to ensure that all books of accounts are done in a fair manner and there is no misrepresentation or fraud that is being conducted. All the public listed firms have to get their accounts audited by an independent auditor before they declare their results for any quarter.
    A Professional suspicion Correct Answer Incorrect Answer
    B Professional skepticism Correct Answer Incorrect Answer
    C Professional cynicism Correct Answer Incorrect Answer
    D Professional incredulity Correct Answer Incorrect Answer
    E Professional pessimism Correct Answer Incorrect Answer

    Solution

    As per the SA 200, the key requirements of an Independent Auditor include: ·         Professional Judgement ·         Ethical requirements ·         Professional Skepticism ·         Sufficient Appropriate Audit Evidence and Audit Risk Professional Skepticism – attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud and a critical assessment of audit evidence. Alertness is required with respect to Contradictory audit evidence, reliability of documents, conditions indicating possible fraud, circumstances requiring audit procedures in addition to those suggested in SAs.

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