Final answer:
An auditor observing an employee prepare a bank reconciliation exemplifies the audit procedure of observation, which is different from professional skepticism, recalculation, and inquiry.
Step-by-step explanation:
An auditor watching an employee prepare a bank reconciliation would be an example of observation. Observation, in the context of an audit, involves watching a process or procedure being performed by others. It is one of the various audit procedures that auditors use to gather evidence. This process allows the auditor to obtain audit evidence about the accuracy of the organization’s records and the regularity of the activities being performed. In contrast, professional skepticism relates to the auditor's attitude that involves questioning and critical assessment, recalculation is the auditor’s independent execution of procedures or controls that were originally performed as part of the entity's internal control, and inquiry consists of seeking information from knowledgeable persons inside or outside the entity.