Which scenario illustrates professional skepticism?

• A. Resisting pressure to manipulate earnings.
• B. Accepting management estimates without review.
• C. Ignoring unfavorable data.
• D. Confirming management's forecast without challenge.

Answer: (A)

Professional skepticism is the auditor’s mindset of questioning and critically evaluating evidence rather than taking management explanations at face value. Resisting pressure to manipulate earnings demonstrates this attitude: the auditor stays objective, seeks corroborating evidence, and challenges assumptions used by management to ensure the numbers aren’t biased or misstated. This doubt-driven approach helps prevent misstatements and supports a reliable assessment.

Accepting management estimates without review, ignoring unfavorable data, or confirming a forecast without challenge all reflect a lack of skepticism, as they involve not challenging management representations or failing to consider contrary evidence.