Which of the following is a true statement regarding professional skepticism?
A) Auditors reject most potential clients perceived as lacking honesty and integrity.
B) If the auditor has past experience with a client, they can assume the client is honest.
C) Material frauds occur in most of the audits of financial statements.
D) Professional skepticism is required only during the planning phase.

Question

Quizplus · Accepted Answer

Professional skepticism requires auditors to question and critically evaluate evidence throughout the audit process, including before accepting a new client. This means that the auditor should be alert to any indications of dishonesty or potential fraud. However, auditors do not reject most potential clients; they should use their professional judgment to assess the risks associated with each engagement and decide whether it is appropriate to take on the client.

Which of the Following Is a True Statement Regarding Professional