Question

Professional skepticism can be broken into three attributes. Which one of the following is NOT one of those three attributes? A commitment to persuasive evidence A willingness to give others a presumption of goodwill until they prove otherwise A questioning mind and a critical assessment of the evidence A recognition that the plaintiff and/or the defendant may be masking the true underlying story QUESTION 2 Which of the following is an example of financial statement and reporting fraud? Failing to post audit results on the company's website Debt ratio is materially higher than industry standards Improper timing of revenue and expense recognition Net income for any quarterly filing is 17% or more below analyst predictions

Answer 1

1.B. A willingness to give others a presumption of goodwill until they prove otherwise.

Skepticism means having a probing mind.

When a person has a probing mind he will not have a presumption of goodwill, rather he would suspect everyone till proven not guilty.

2.C.Improper timing of revenue and expense recognition.

Improper timing revenue, expenses will amount to a fraud, since the income will be either understated or overstated.

Rest of the options will not amount to fraud.