What Is the Primary Role of the Court System for the Auditing

question 5

Multiple Choice

What is the primary role of the court system for the auditing profession?

• A) To act as a quality-control mechanism.
• B) To provide guidance on unclear legislation.
• C) To punish audit firms that issue the wrong audit report.
• D) To express opinions on the fairness of accounting principles.

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Definitions:

Legal System

The comprehensive system of rules and principles which govern a specific country or community, guiding the administration of justice and regulatory affairs.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.

IASB

International Accounting Standards Board, an independent body that develops and approves International Financial Reporting Standards (IFRS).