In Which of the Following Aspects Does Audit Differ from Compilation

question 38

Multiple Choice

In which of the following aspects does audit differ from compilation or review?

• A) An audit gives reasonable level of assurance to the users, whereas a compilation or review does not give any level of assurance to the users.
• B) An audit requires an understanding of the entity's internal controls and assessment of fraud risk, whereas a compilation or review does not require such understanding or assessment.
• C) An audit requires an auditor or accountant to perform inquiry and analytical procedures, whereas a compilation or review does not require such procedures.
• D) An audit is performed to obtain limited assurance that there are no material modifications that should be made to the financial statements, whereas a compilation or review is performed without obtaining any level of assurance.

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Definitions:

Government

The organized body responsible for overseeing the political administration and governance of a state or nation.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price in a given period.

Binding

A situation, typically in the context of contracts or agreements, where parties are legally obligated to adhere to the terms set forth.

Price Ceiling

A legal maximum price set by authorities for goods or services, intended to prevent prices from rising above a certain level to protect consumers.