An auditor should recognise that the application of auditing procedures may produce evidential matter indicating the possibility of errors or fraud; therefore, an auditor should:
A) extend the work to audit most recorded transactions and records of an entity.
B) design audit tests to detect unrecorded transactions.
C) not depend on internal accounting control features that are designed to prevent or detect errors or irregularities.
D) plan and perform the engagement with an attitude of professional scepticism.

Question

Quizplus · Accepted Answer

The best choice is D because an auditor should plan and perform the engagement with an attitude of professional scepticism, which involves a questioning mind and a critical assessment of audit evidence. This approach recognizes the possibility of errors or fraud in the entity's accounting records and requires the auditor to obtain sufficient and appropriate audit evidence to support the opinion expressed in the audit report. Option A is incorrect because it is not necessary to audit most recorded transactions and records of an entity. Option B is incorrect because designing audit tests to detect unrecorded transactions is only one of many audit procedures. Option C is incorrect because internal accounting control features can be relied upon to prevent or detect errors or irregularities, although such controls alone may not be sufficient to support an unqualified audit opinion.

An Auditor Should Recognise That the Application of Auditing Procedures