Answered: Demonstrate your understanding of…

Business

Accounting

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

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter4: Professional Liability, Auditor Judgment Frameworks, And Professional Responsibilities

Section: Chapter Questions

Problem 48RSCQ

See similar textbooks

Related questions

Q: The "other information" is included in the audit opinion, or is it excluded? Justify your choice.

A: In accounting, auditing is the act of evaluating the financial statements of a corporate entity to…

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: 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: Do you believe Gallant’s actions are ethical? Why or why not?

A: Complete data is assumed and referred to a source.

Q: For what does an auditor use professional skepticism?

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

Q: a. What is the relationship between a. the ethical obligation of honesty and truth telling?b. Is it…

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: countant encounter when trying to decide on “full disclo

A: Accountant role is quite complicated and he has to honest and committed to principal of accounting.

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: A code of ethics is of little or no value. Do you agree or disagree? Support your answer.

A: Companies adopted ethical codes to help their participants learn the distinction between correct and…

Q: Contrast the liability issues and disclosure of errors. Does disclosure minimize the risk? Does the…

A: A liability is an obligation which a person makes or owes to another party in the business. It could…

Q: t an audito

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

Q: Which of the following is an accurate statement about professional skepticism? Select one: a.…

A: Professional Skepticism is simply means an attitude of questioning mind. Professional Skepticism…

Q: Distinguish between independence in fact and independence in appearance. Can auditors be independent…

A: Independence in fact means when the auditor is actually independent and not working as the puppet of…

Q: When might the rule “Let your conscience be your guide” not be a sufficient basis for (a) your…

Q: Which of the following statement is not true about assurance ? Assurance is based on the auditor's…

A: Assurance refers to the certainty of any event given by an assurer on the basis of assessment of…

Q: Why would a staff auditor want to be “part of the client’s team” and consent to questionable…

Q: In our discussion of the KPMG professional judgment framework, we pointed out that biased judgments…

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: 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 is the risk of Incorrect Acceptance?

A: Risk of incorrect acceptance: The risk that the sample selected by the auditor may show that there…

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 consequences for a CPA who commits an Act Discreditable?

A: Discreditable: As per the code of conduct, a member will not perform an act discreditable i.e. an…

Q: Roger Royce, CPA, has encountered a situation that he thinks may pose a threat to his independence…

A: Independence: Independence assures auditors have no financial interest in audited businesses. An…

Q: Is there a conceptual difference between an error and negligence from a reasonable care perspective?…

Q: What is risk of incorrect acceptance? A. The risk that the auditor concludes that a material…

A: The risk of incorrect acceptance is referred to a situation in which the results of an audit sample…

Q: What is meant by the evaluation of a client's ability to continue as a going concern? What are some…

A: Going concern concept states that the financial statements of an entity should be prepared on the…

Q: In a compilation engagement, the practitioner does not need to consider materiality since it does…

A: Compilation engagement refers to the practice where practioner like CPA is hired for presentation…

Q: • Describe some civil and criminal consequences if CPAS/auditors fail to follow professional…

A: Auditor's Liability Risk: Audit risk is the possibility that financial statements are significantly…

Q: What type of situation would require an auditor to give an unmodified opinion without a standard…

A: If the auditor concludes that all the below conditions are met and the accounting changes is…

Q: What is the difference between a CPA’s unqualified opinion or “clean” opinion and a qualified one?

A: US GAAP:US GAAP are financial reporting standards provided by FASB, which is a US based board that…

Q: Which of the following statements is incorrect with respect to the ethical branch of stakeholder…

A: Stakeholder theory is the theory which states how well an organization can do better in their…

Q: Describe the term Legitimized disagreement and skepticism?

A: Disagreement means not giving the consent or objecting to something such as a proposal or people's…

Q: In your own words, explain why moral consideration and past consideration usually do not constitute…

A: Consideration in legal terms means something in return. It can be understood with the maxim - quid…

Q: A departure from GAAP could lead to a disclaimer of opinion. O True False

A: The acronym for GAAP is Generally Accepted Accounting Principles. GAAP is generally a set of…

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…

Q: Professional skepticism is

A: Answer with explanation related to Professional Skepticism is given below,

Q: - form of opinion you would consider the most appropriate

A: The client has made appropriate disclosures regarding the intention to discontinue the manufacturing…

Question

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

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

When might the rule “Let your conscience be your guide” not be a sufficient basis for (a) your personalethical decisions and (b) your professional ethical decisions?
Describe one professional experience in which you used evidence as the basis for decision making and one experience in which you made a decision without evidence for support. For each of the situations described, explain how the use of evidence (or the lack of it) impacted the outcome of your decision making. Be specific in terms of positive and negative impacts.
What rules or policies should be developed to avoid the ethical problem?
Explain the threats to professional skepticism that might influence audit judgment.
Describe the term Legitimized disagreement and skepticism?
Which of the following is considered a type of threat to compliance with the Rules of the Code of Professional Conduct? A. Self interest B. Illegitimate skepticism C. Lack of management participation D. Irrevocability
Explain the steps that apply your own sense of right and wrong to ethical dilemmas.
Utilitarianism does not require which of the following actions when a person considers how to resolve an ethical dilemma? a. Identification of the potential problem and courses of action. b. Identification of the potential direct or indirect impact of actions on each affected party who has an interest in the outcome. c. Identification of the motivation of the person facing the ethical dilemma. d. Assessment of the desirability of each action for each affected party.
For what does an auditor use professional skepticism?
In your own words, explain why moral consideration and past consideration usually do not constitute consideration. Do you agree with this rule?
Is there a conceptual difference between an error and negligence from a reasonable care perspective? Give examples of each in your response.
To be ethical, the agent (person) must judge action viewed by absoluteness of good motive according to the deontological viewpoint which explains that the deontologists look at the essential consequences of the acts. TRUE or FALSE? Justify your claim and if needed, identify the error and change it into its appropriate use. Provide the positive and negative sides of using deontological ethics.