The Existence of Audit Risk Is Recognized by the Statement

question 38

Multiple Choice

The existence of audit risk is recognized by the statement in the auditor's standard report that the:

• A)auditor is responsible for expressing an opinion on the financial statements, which are the responsibility of management.
• B)financial statements are presented fairly, in all material respects, in conformity with applicable financial reporting framework.
• C)audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
• D)auditor obtains reasonable assurance about whether the financial statements are free of material misstatement.

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Definitions:

Shares Outstanding

Refers to all shares currently owned by shareholders, company insiders, and investors in the public domain, representing ownership in a company.

Market Price

The present cost at which an asset or service is offered for buying or selling in the market.

Merged Firm

Refers to a company formed when two or more firms voluntarily combine their operations, often to achieve synergies and improve competitive standing.

Shares Outstanding

The total number of shares of a corporation's stock that are currently owned by all its shareholders, including shares held by institutional investors and restricted shares.