Which of the Following Is a Difference Between Audits and Compilations

question 17

Multiple Choice

Which of the following is a difference between audits and compilations?

• A) The auditor's objective is to obtain reasonable assurance that the financial statements are free of material misstatements, whereas the objective of a compilation is to assist management in presenting financial information without obtaining any level of assurance.
• B) Audits do not require an understanding of the entity's internal controls and an assessment of fraud risk, whereas compilations require an understanding of the entity's internal controls and an assessment of fraud risk.
• C) Audits have a narrower scope as compared to reviews, whereas compilations have a broader scope as compared to reviews.
• D) Audits provide a reasonable level of assurance to the users of the financial statements, whereas compilations provide a limited level of assurance to the users of the financial statements.

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Definitions:

Amniocentesis

A medical procedure used in prenatal diagnosis, where a small amount of amniotic fluid is extracted from the amnion around a fetus to test for genetic conditions.

Biopsy

A medical test involving the extraction of sample cells or tissues for examination to determine the presence or extent of a disease.

Genetic Abnormalities

Irregularities in DNA that can lead to diseases or conditions.

Ultrasound

A medical imaging technique that uses high-frequency sound waves to produce images of structures within the body, commonly used during pregnancy.