Which of the Following Statements Is Correct About the Objective

question 14

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 reasonable assurance about whether the financial statements are free from material 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 persuasiveness of the evidence gathered.

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Definitions:

Indirect Expenses

Expenses that are not directly tied to a specific product or service but are necessary for the overall operation of a business.

Direct Expense

A cost that can be directly attributed to the production or sale of specific goods or services in a business.

Indirect Expense

Costs that are not directly tied to a specific product or service but are necessary for the overall operation of a business, such as utilities or rent.

Rent

The cost incurred for using properties or equipment owned by another party for a specified period.