Rotten cement - skim coat or board?

[BradG]

I've taken all the tile off of my bathroom wall and found severely deteriorted concrete on the shower body wall. The back wall has been repaired at some point with cement board but the lower half of it will need some repair too as it's either crumbled or pulled loose. The construction is large, white masonry block with cement then plaster. Building is a hi-rise built in mid-50's.

On the back wall, which already has board, I'll use the same to repair but I'm wondering if I should try to re-skim the shower-body wall with new cement. I'm afraid that if I cut out a square for cement board that I might have a hard time matching the depth which looks to be around an inch.

My two most important questions, if skimming cement, are:
1) how do I know when I've got all the bad cement off?
2) do I need a primer/sealer for the old cement, in order for the new cement to take hold?

Here's a pic, if it helps at all. The cement below the shower valves has completely crumbled away to the brick:

[troubleseeker]

First, you are not dealing with cement, but morter. You know you have all the bad stuff off when it no longer releases from the blocks easily or sounds hollow when you tap on it. In order for the new morter to bond, the wall will have to be cleaned and freed of any dusty film on it, then I would suggest using a bonding agent.

Hopefully someone who is a mason by trade will chime in for you. There is probably more to it than my simple answer.