Certified Government Auditing Professional (CGAP) Practice Exam

When should an auditor maintain professional skepticism?

1. Only when evidence suggests wrongdoing

2. Throughout the entire audit process

3. When working with long-term clients

4. When management is cooperative

The correct answer is: Throughout the entire audit process

Maintaining professional skepticism throughout the entire audit process is crucial for auditors, as it ensures a critical assessment of the evidence gathered and the representations made by management. Professional skepticism involves questioning the validity of the information presented and not taking it at face value. This mindset helps auditors remain alert to potential inconsistencies and biases, enabling them to make more informed judgments. Consistently applying professional skepticism allows auditors to effectively evaluate the risk of material misstatement in financial statements, whether due to error or fraud. It encourages a thorough examination of evidence, enhances the auditor's objectivity, and promotes a more diligent approach in identifying areas that may require further inquiry. In contrast, limiting skepticism to instances where evidence suggests wrongdoing or situations with long-term clients could lead to complacency or oversight of important issues. Additionally, being overly trusting when management is cooperative might undermine the auditor's duty to perform an impartial and rigorous review. Therefore, maintaining a consistently skeptical approach throughout the audit process is essential for achieving reliable and valid audit results.