CA Inter P5 · Chapter 1 · Question 6 of 10
Which of the following statements about professional judgment in an audit is correct?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) It must be exercised throughout the audit and cannot be used to justify decisions that are not supported by the facts and circumstances of the engagement
Explanation
SA 200 requires the auditor to exercise professional judgment in planning and performing an audit, for example on materiality, audit risk, the nature, timing and extent of procedures and the evaluation of evidence. Judgment must be applied by a person with suitable training and experience, must be appropriately documented, and is not a justification for decisions unsupported by the facts.
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