Why due professional care is needed in the conduct of internal audit activities?
The exercise of due professional care allows the auditor to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud, or whether any material weaknesses exist as of the date of management’s assessment.
What does due professional care mean?
Calls for the application of the care and skill expected of a reasonably prudent and competent auditor in similar circumstances. Due professional care is exercised when audits are carried out in accordance with standards set for the profession.
How do you work out due professional care?
Due professional care is exercised when audits are carried out in accordance with the standards set for the profession. The auditor is usually obligated to exercise due professional care by the terms of the engagement letter; the obligation exists even if it is not specifically stated in the engagement letter.
What is professional care in auditing?
The matter of due professional care means what the independent auditor does and how appropriately he or she does it. An auditor should possess the degree of skill and competence commonly possessed by other auditors and should exercise it with proper care and diligence.
When considering due professional care which of the following is unnecessary?
Due professional care implies reasonable care and competence, not infallibility or extraordinary performance. Thus, which of the following is unnecessary? The conduct of extensive examinations.
What is the difference between due professional care and professional skepticism?
07 Due professional care requires the auditor to exercise professional skep- ticism. Professional skepticism is an attitude that includes a questioning mind and a critical assessment of audit evidence.
Does due professional care also mean infallibility?
Due professional care does not imply infallibility. Due professional care implies reasonable care and competence, not infallibility or extraordinary performance. As such, due professional care requires the internal auditor to conduct examinations and verifications to a reasonable extent.
How do you get reasonable assurance?
To achieve reasonable assurance, the auditor needs to obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably low level. This means that there is some uncertainty arising from the use of sampling, since it is possible that a material misstatement will be missed.
Why is professional Scepticism important?
Professional skepticism is an essential attitude that enhances the auditor’s ability to identify and respond to conditions that may indicate possible misstatement. It includes a critical assessment of audit evidence. This critical assessment is necessary in order for the auditor to draw appropriate conclusions.
What is professional Scepticism?
What is professional scepticism? To show professional scepticism means: having a questioning mind. being alert to anything that may indicate misstatement due to error or fraud. critically assessing audit evidence.
What is reasonable assurance of employment?
“Reasonable Assurance” is an unemployment insurance term that indicates a school employee has a contract (written or implied) that indicates they will likely be employed for the following school year, term, or remainder of a school term.
What is a letter of reasonable assurance?
The Letter of Reasonable Assurance (LRA) is a written agreement from the school that an employee can expect to return to the same or similar job after a scheduled break, for example, in the next school year.