Which of the following tests would involve the exercising of professional judgment?
A)Assessing the appropriateness of the estimate of the provision for doubtful debts.
B)Obtaining a bank confirmation to support the cash at bank figure.
C)Checking the calculations on a sales invoice.
D)All of the answers given are correct.

Question

Quizplus · Accepted Answer

Assessing the appropriateness of the estimate of the provision for doubtful debts requires professional judgment as it involves analyzing the company's historical data, market trends, and economic conditions. The auditor needs to exercise their judgment to decide whether the estimate is reasonable or not. Obtaining a bank confirmation and checking calculations on a sales invoice are more routine tasks that may not involve as much professional judgment.

Which of the Following Tests Would Involve the Exercising of Professional