Which of the Following Statements Is Correct About the Objective

question 26

Multiple Choice

Which of the following statements is correct about the objective of the audit process?

• A)Generally accepted auditing standards require the auditor to obtain assurance about whether the financial statements are free from all misstatements.
• B)Assurance is obtained by the auditor when he has obtained sufficient appropriate audit evidence to reduce audit risk to an acceptably low level.
• C)A misstatement is an error or fraud in the financial statements that might cause a user of the financial statements to change his decision about the company.
• D)Sufficient appropriate audit evidence refers to the quantity and quality of the evidence gathered.

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Definitions:

Par Value

The nominal or face value of a stock or bond as stated by the issuing company.

Cash Interest Payment

The actual cash paid by a borrower to a lender or bondholder as compensation for the use of borrowed money, usually at set intervals.

Bond Exchange

The process of trading bonds in the financial market, where investors buy and sell debt securities issued by entities like governments and corporations.

Market Rate of Interest

The prevailing rate of interest observed in the marketplace for loans and investments.