CFE – Fraud Prevention and Deterrence — Question 33

Which of the following statements is TRUE regarding how fraud examiners should exercise professional skepticism during a fraud examination engagement?

Answer options

• A. Professional skepticism means beginning all assignments with the belief that something is amiss
• B. Fraud examiners should not relax their skeptical attitudes under any circumstances
• C. Fraud examiners should form the engagement hypothesis without regard to the available preliminary information
• D. Professional skepticism involves maintaining a mindset that no fraud has occurred

Correct answer: A

Explanation

The correct answer, A, reflects that professional skepticism entails an initial assumption of potential issues. Option B is incorrect because while skepticism is essential, it should be balanced with evidence. Option C is wrong as forming a hypothesis should be informed by preliminary information, and option D misunderstands skepticism, which does not imply the absence of fraud but rather a questioning attitude.