Refer to the Focus on Fraud feature "The Crucial Role of Professional Skepticism."
a. What is professional skepticism?
b. Why is professional skepticism helpful for detecting fraud?
c. What are the key behaviors needed to successfully exercise professional skepticism during the performance of the audit?
d. Why is it sometimes difficult for auditors to exercise appropriate levels of professional skepticism in practice?
e. Imagine that you are working on an audit engagement. What are the personal characteristics and behaviors of management or other client employees that might make you skeptical about whether or not they are providing you accurate audit evidence? Aside from personal observations, what publicly available information about management or other client employees could you obtain to determine whether you should exercise heightened professional skepticism in your dealings with these individuals?