[lk]

This is a Becker Chapter 1 question. Very confused by the explanation. Has anyone seen this question before and wanna share your thoughts? thanks!

My thoughts here:

Explanation of choice C doesn’t sound convincing to me at all. Of course assessment of prior year is not necessarily reflective of current year integrity. But it is definitely not irrelevant. Just think of a person who had unethical behaviors before. Shouldn’t we consider this person more likely to do something bad again than other people who have no bad history? So looking at prior year assessment is one way to exercise professional skepticism. Just like choices B and D, we are consulting with third party(i.e. specialist, prior auditor, etc.) because we are skeptical about what the management told us.

Choice A doesn’t do this. Designing additional audit procedures might be caused by the complexity of the engagement, insufficient evidence, change of situation from prior period, etc. It might not necessarily happen solely because we are doubtful about what management told us. So I selected choice A.

What is wrong with my thinking?

Question:
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.

Becker 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.

[mckan514w]

okay here's my take- this is one of those really annoying you will see them all throughout Audit questions of all of the answers are correct but what is the most correct…. in this case A, B and D are all using professional skepticism on actual audit procedures so answer C would be the best answer because this is something that should occur before agreeing to the engagement. Thus you it really insn't applying professional skepticism it is using your judgement and following protocol prior to the audit. After you talk to the other auditor you make the call on whether to accept engagement or not and then employ your skepticism based on statements they may have made…. (Just my take 🙂 )

And they ask me why I drink

BEC 71, 82
AUD 75
REG 75
FAR 61, 69, 83

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[lk]

Thanks a lot homes! That explains much better than the Becker one. But these things are so hard to tell when you see a new MCQ. Not sure if i can make it right next time i see something like this.

But thank you homie! i understand why i was wrong now.

[Gary]

Be thankful it wasn't in Wiley

“Answer C is correct because A, B, and D aren't”

AUD - 89
BEC - 84
FAR - 89
REG - 90

AUD - 89

FAR - 89

BEC - 84

REG - 90

YES!

AUD 8/18/16
FAR 11/16
BEC 1/17
REG 2/17

[Author]

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