AUDITING+ASSURANCE SERVICES (LL)
11th Edition
ISBN: 9781266448119
Author: MESSIER
Publisher: MCG
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Question
Chapter 2, Problem 2.19MCQ
To determine
Introduction: Both the management and the external auditor have some level of responsibility for a financial statement as per Generally Accepted Accounting Principles.
To select: The statement that best describes management’s and the external auditor’s levels of responsibility for a public company’s financial statements.
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Students have asked these similar questions
Which of the following is the most important responsibility of the external auditor?
a.
To ensure that financial statements comply with applicable financial reporting framework
b.
To ensure compliance with laws and regulations applicable to the entity
c.
To design, implement and maintain a system of internal control
d.
To express an opinion on a true and fair view of the financial statements
Which of the following statements about the auditor's responsibilities in public company audits is true as covered by the PCAOB?
A. The auditor issues an opinion on the financial statements and management issues the opinion on internal control over financial reporting.
B. The auditor issues an opinion on the financial statements only if internal control over financial reporting is found to be effective.
C. The auditor issues an opinion on the financial statements; if those are found to be fairly stated, the auditor proceeds to issue an opinion on internal control over financial reporting.
D. The auditor issues opinions on the financial statements and internal control over financial reporting.
Which of the following principles is most closely associated with the auditors’ conclusion as to the fair presentation of the entity’s financial statements?a. Communication principle.b. Performance principle.c. Reporting principle.d. Responsibilities principle.
Chapter 2 Solutions
AUDITING+ASSURANCE SERVICES (LL)
Ch. 2 - Prob. 2.1RQCh. 2 - Prob. 2.2RQCh. 2 - Prob. 2.3RQCh. 2 - Prob. 2.4RQCh. 2 - Prob. 2.5RQCh. 2 - Prob. 2.6RQCh. 2 - Prob. 2.7RQCh. 2 - Prob. 2.8RQCh. 2 - Prob. 2.9RQCh. 2 - Prob. 2.10RQ
Ch. 2 - Prob. 2.11RQCh. 2 - Prob. 2.12RQCh. 2 - Prob. 2.13RQCh. 2 - Prob. 2.14RQCh. 2 - Prob. 2.15MCQCh. 2 - Prob. 2.16MCQCh. 2 - Prob. 2.17MCQCh. 2 - Prob. 2.18MCQCh. 2 - Prob. 2.19MCQCh. 2 - Prob. 2.20MCQCh. 2 - Prob. 2.21MCQCh. 2 - Prob. 2.22MCQCh. 2 - Prob. 2.23MCQCh. 2 - Prob. 2.24PCh. 2 - Prob. 2.25PCh. 2 - Prob. 2.26P
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Similar questions
- Professional guidance indicates that the auditor should consider revenue recognition to be high risk in planning an audit of a company’s financial statements. a. Identify the activities that affect the revenue cycle. b. Identify the financial statement accounts typically associated with the revenue cycle.arrow_forwardWhich of the following engagements is most likely to be considered an operational audit? The auditor determines whether the organization is following provisions of laws and regulations. The auditor examines information presented in an entity’s financial statements to determine whether the financial statements are presented fairly in accordance with the applicable financial reporting framework. The auditor evaluates the organization’s efficiency in processing payments. The auditor assists the client in preparation of financial statements.arrow_forwardWhich of the following statements is correct concerning an auditor’s responsibilities regarding financial statements? A. The fair presentation of audited financial statements in accordance with an applicable financial reporting framework is an implicit part of the auditor’s responsibilities B. An auditor’s responsibilities for audited financial statements are confined to the expression of the auditor’s opinion C. Making suggestions that are adopted about the form and content of an entity’s financial statements impairs an auditor’s independence D. The auditor’s report should provide an assurance as to the future viability of the entityarrow_forward
- Which of the following type of auditors provides an opinion on the truthfulness and fairness of the financial statement of the company? External Auditor Internal Auditor Cost Auditor Operational Auditorarrow_forwardTRUE OR FALSE? WHY? For purposes of examining the client's financial statements, the auditor is concerned with those objectives or features of internal control that primarily relate to the entity's ability to record, process, summarize, and report financial data.arrow_forwardThe primary purpose for obtaining an understanding of the entity’s environment (including its internal control) in a financial statement audit isa. To determine the nature, timing, and extent of substantive procedures to be performed.b. To make consulting suggestions to the entity’s management.c. To obtain direct sufficient appropriate audit evidence to afford a reasonable basis for an opinion on the financial statements.d. To determine whether the entity has changed any accounting principlesarrow_forward
- What options are available to the auditor for presenting reports on the entity’s financial statements and internal control over financial reporting?arrow_forwardAs stated in the report from the Independent Auditors, the primary responsibility for a company's financial statements lies with the company's management. What is the responsibility of the auditor? Explain the two key paragraphs in an Auditor's Opinion.arrow_forwardIn addition to the preparation of financial statements, it is also the responsibility of those charged with governance to: * Identify the financial reporting framework to be used in the preparation and presentation of their financial report. Establish and maintain internal controls that are effective in preventing and detecting material misstatements Selecting and applying appropriate O accounting policies and making reasonable accounting estimates All of the above.arrow_forward
- The fair presentation of financial statements in conformity with applicable financial reporting framework is the responsibility of the Shareholders Management Auditors Board of Directorsarrow_forwardWhich of the following combinations of standards and types of audits are most closelyrelated to the activities of the Public Company Accounting Oversight Board?a. Develop Auditing Standards for the audits of nonpublic entities.b. Develop Auditing Standards for the audits of public entities.c. Develop Statements on Auditing Standards for the audits of nonpublic entities.d. Develop Statements on Auditing Standards for the audits of public entities.arrow_forwardWhich of the following best describes the general contents of the introductory paragraph of the auditors’ report?a. A description of an audit examination, including the fact that the audit was conducted under standards established by the PCAOB.b. The auditors’ conclusion with respect to the fairness of the entity’s financial statements.c. Statements identifying the responsibility of auditors and management in the financial reporting process.d. The auditors’ conclusion with respect to the effectiveness of the entity’s internal control over financial reporting.arrow_forward
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