Question

Accounting - principle of auditing

• Q1:

Test

Explain the difference between competency and independence in no more than 4 lines

• Q2:

Explain the relationship between professional skepticism and evidence in no more than 6 lines

Answer 1

Question -1;

Competency refers to the capabilities of the auditor to detect and identify errors & mistatements in the financial statements. In other words we can say that competency refers to the abilities of an auditor to perform own duties. Wheras independence refers to the condition of an auditor in which an auditor can work without any undue influences. In other words we can say that independence means state of working freely without any undue pressure.

Question – 2;

Professional skepticism refers to the state of an attitude that includes a questioning mind. In other words we can say that state of critical & interrogative mind due to conditions which may indicate possible misstatement, error or fraud is known as professional skepticism. Wheras evidence refers to the documentary & other valid proof of any record mentioned in the financial statement or issued by the authorised individuals & insitutions. Thus professional skepticism and evidence both are associated because professional skepticism requires proper & valid evidence to reach at final decision by an auditor.