An Auditor Is Required to Establish an Understanding with a Client

question 50

Multiple Choice

An auditor is required to establish an understanding with a client regarding the responsibilities for each engagement.This understanding generally includes

• A) Management's responsibility to guarantee that there are no material misstatements due to fraud.
• B) The auditor's responsibility to plan and perform the audit to provide reasonable, but not absolute, assurance of detecting material errors or fraud.
• C) Management's responsibility for providing the auditor with an assessment of the risk of material misstatement due to fraud.
• D) The auditor's responsibility for the fairness of the financial statements.

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Definitions:

High Sensitivity

The capability of an assessment to accurately detect individuals who have the disease (true positive rate).

Low Specificity

A characteristic of a diagnostic test that indicates a high likelihood of false positives, meaning it often indicates a disease or condition is present when it is not.

Sensitivity

The ability of a test to correctly identify those with the disease (true positive rate).

Process Consultant

A professional who assists organizations in understanding and improving their internal processes and interactions for better efficiency and communication.