- 10 Marks
AA – L2 – Q7 – The Role and Responsibilities of Auditors
Highlight directors' responsibilities for financial statements at Apex Ventures. Describe professional scepticism and explain its importance in auditing Apex Ventures.
Question
(a) Briefly highlight the directors’ responsibilities relating to the financial statements at Apex Ventures.
(b) During the audit team planning meeting for Apex Ventures, a member of the audit team passed a comment that, based on past experience with the client, he was confident that the management of the client was honest and there was no issue as regards management integrity or risk of fraud in the company. The audit manager responded that the auditor should always maintain an attitude of professional scepticism throughout the audit.
Briefly describe ‘professional scepticism’ and elaborate on the response of the audit manager.
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