In which situations is the principle of Professional Judgment applied correctly?

I. Darwin, the most senior CPA in the engagement team, raises that since the assessed risk of material misstatement is at a very high level, he is making use of his professional judgment and setting the materiality level higher than what it used to be.

II. Daniel has been auditing financial statements of manufacturing companies for three years now. In an audit of one of the manufacturing company clients that he has, he has instructed his staff to proceed with the final phase of the audit as he sees that the evidence gathered is already enough to support the opinion.

III. Klein, being a CPA that has been involved in numerous planning activities for audit clients, raises to the team that there seems to be a need for alternative audit procedures in the examination of sales amounts due to a recently identified risk factor.

Group of answer choices

I and II

All of the situations

II and III

III only

None of the situations

I and III

II only

I only