Determine the attitude that the engagement partner expects the audit team to maintain in the above situation. Which risks can be reduced while…

In the given case, the engagement partner expects the audit team to maintain an attitude of professional skepticism throughout the audit, especially while evaluating unusual year-end sales transactions. Professional skepticism refers to an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of audit evidence. Maintaining professional skepticism throughout the audit is necessary if the auditor is to reduce the risks of: Overlooking unusual circumstances.Over generalising when drawing conclusions from audit observations.Using inappropriate assumptions in determining the nature, timing, and extent of the audit procedures and evaluating the results thereof.