Leroy audits the financial statements of a small business.During the course of his audit he notices that all five members of top management have purchased new BMWs.Given that each manager's salary is less than $100,000 per year, Leroy becomes suspicious about how all five of them were able to buy such an expensive automobile.He decides to double check the bank statements for the year and postings to expense accounts that might indicate improper expenditures.Leroy's actions demonstrate:
A)Professional skepticism
B)Objective decision making
C)Due care
D)All of the above

Question

Quizplus · Accepted Answer

Leroy's actions demonstrate professional skepticism, objective decision making, and due care. Professional skepticism is the attitude that an auditor should maintain when performing an audit, which involves questioning the information provided by the client and being alert to the possibility of fraud or error. Objective decision making is the ability to make decisions without being influenced by personal biases or preferences. Due care is the level of care that a reasonable person would exercise in similar circumstances.

Leroy Audits the Financial Statements of a Small Business