Auditors provide “reasonable assurance” that the financialstatements are “fairly stated, in all material respects.” Questions are often raised as to theresponsibility of the auditor to detect material misstatements, including misappropriationof assets and fraudulent financial reporting.a. Discuss the concept of “reasonable assurance” and the degree of confidence thatfinancial statement users should have in the financial statements.b. What are the responsibilities of the independent auditor in the audit of financialstatements? Discuss fully, but in this part do not include fraud in the discussion.c. What are the responsibilities of the independent auditor for the detection of fraudinvolving misappropriation of assets and fraudulent financial reporting? Discussfully, including your assessment of whether the auditor’s responsibility for thedetection of fraud is appropriate.
Auditors provide “reasonable assurance” that the financial
statements are “fairly stated, in all material respects.” Questions are often raised as to the
responsibility of the auditor to detect material misstatements, including misappropriation
of assets and fraudulent financial reporting.
a. Discuss the concept of “reasonable assurance” and the degree of confidence that
financial statement users should have in the financial statements.
b. What are the responsibilities of the independent auditor in the audit of financial
statements? Discuss fully, but in this part do not include fraud in the discussion.
c. What are the responsibilities of the independent auditor for the detection of fraud
involving misappropriation of assets and fraudulent financial reporting? Discuss
fully, including your assessment of whether the auditor’s responsibility for the
detection of fraud is appropriate.
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