An auditor is considered a 'watchdog and not a bloodhound'. This implies:
A. The auditor must approach the work with reasonable care and skepticism, but not assuming everyone is dishonest
B. The auditor investigates only cash transactions
C. The auditor works only at night
D. The auditor must be aggressive in finding fraud
Answer: Option A
Solution (By JKSSB Mock Tests)
Coined in the Kingston Cotton Mill case, it means an auditor must exercise reasonable skill and care but isn't required to approach the audit with suspicion of fraud.
S1: Vouching is the examination of documentary evidence. S2: Verification is the proof of ownership, existence, and valuation of assets. Which statement(s) is/are correct?
Explanation:
Vouching involves checking vouchers to verify the authenticity of transactions. Verification goes beyond vouching to confirm the physical existence, legal ownership, and proper valuation of assets and liabilities at the balance sheet date. Both are correct.
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