Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

What role does professional skepticism play in auditing?

1. It allows auditor flexibility in judgment.

2. It minimizes the need for evidence collection.

3. It encourages questioning of audit evidence and findings.

4. It endorses acquiescence to management's assertions.

The correct answer is: It encourages questioning of audit evidence and findings.

Professional skepticism is a critical mindset that auditors must maintain throughout the audit process. It involves an attitude of questioning and a critical assessment of audit evidence. By encouraging auditors to consistently question the validity and reliability of information presented, professional skepticism plays a pivotal role in identifying potential misrepresentations, biases, or errors. This level of scrutiny helps to ensure that the evidence collected is robust and that the conclusions drawn are sound. For instance, when auditors approach financial statements or management assertions, professional skepticism prompts them to evaluate the evidence with a discerning eye, rather than accepting information at face value. This practice ensures that the auditor performs thorough due diligence, which is essential for providing a high-quality audit opinion. In contrast, the other options either misrepresent the essence of professional skepticism or suggest practices that could undermine its importance. Professional skepticism is about being critical and questioning, rather than providing flexibility to the auditor's judgment without the basis of evidence, reducing the necessity of evidence collection, or acquiescing to management's claims without proper verification.