'The auditor should not assume that management is dishonest, but the possibility of dishonesty must be considered.' This is an example of:
A) unprofessional behaviour.
B) a rule in the joint Code of Professional Conduct.
C) due diligence.
D) an attitude of professional skepticism.

Question

Quizplus · Accepted Answer

This statement reflects the attitude of professional skepticism, which is a fundamental concept in auditing. The auditor is required to approach the engagement with a questioning mind and be alert for any indications of fraud or error. While the auditor should not assume that management is dishonest, they should always consider the possibility of dishonesty and take appropriate steps to mitigate any associated risks. This is a key aspect of due diligence in auditing. Therefore, option (D) is the correct answer.

'The Auditor Should Not Assume That Management Is Dishonest, but the Possibility