Which of the Following Would Normally Be Considered Sufficient to Demonstrate

question 79

Multiple Choice

Which of the following would normally be considered sufficient to demonstrate due care on the part of the auditor?

• A) The auditor had its work reviewed by another audit firm
• B) The auditor cites adherence to generally accepted auditing standards (GAAS)
• C) No omissions or misstatements have been found in the client's financial statements
• D) The auditor signs a statement expressing its unmodified opinion as to the fairness of the financial statements

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Definitions:

Employees

Individuals who work for another person or organization in return for compensation.

Expressed Agency

An agency created in a written or oral agreement. Also called agency by agreement.

Principal

The main party to a transaction, such as a buyer or seller in a contract, or an individual who empowers another (agent) to act on their behalf.

Contract Authority

A power granted to an individual or entity to enter into legally binding agreements on behalf of another person or entity.