ACCA Advanced Audit and Assurance (AAA) Practice Exam

What fundamental attitude is associated with professional skepticism?

1. A nonchalant approach to evidence

2. A questioning mindset and alertness to fraud

3. An overly trusting attitude towards management

4. A focus on financial gain

The correct answer is: A questioning mindset and alertness to fraud

Professional skepticism is characterized by a questioning mindset and an alertness to potential misstatements and fraud in the context of an audit. This attitude involves a critical assessment of evidence and does not take information at face value, especially when it pertains to management assertions. Auditors with professional skepticism are mindful of the possibility of error or fraud and approach evidence with a healthy level of inquiry and caution. This approach promotes a thorough examination of information, thus enhancing the overall quality of the audit. It ensures that auditors remain objective and independent, ultimately contributing to the reliability of their audit findings and opinions. By being aware of biases and having a proactive approach to evaluating evidence, auditors can better protect the interests of stakeholders and comply with ethical standards.