The Auditing Standards Describe How an Auditor Determines If the Preconditions

question 56

Multiple Choice

The auditing standards describe how an auditor determines if the preconditions for an audit are present.Which of the following would be a precondition for an audit?

• A)The auditor obtains the agreement of management that it acknowledges and understands its responsibility for the issuing of the financial statements in accordance with the financial reporting framework.
• B)The auditor obtains the agreement from management that it acknowledges and understands its responsibility for internal controls so financial statements can be prepared free of material misstatement.
• C)The auditor obtains the agreement of management that it agrees to provide the auditor with all information that management is aware of that might be relevant to the preparation of the financial statements.
• D)The auditor determines whether the financial reporting framework (the set of accounting standards)used by the client to prepare the financial statements is acceptable.

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Definitions:

Information Overload

The state of being overwhelmed by the vast amount of information available, making it difficult to process or make decisions.

Personal Agenda

An individual’s private motivations, goals, or objectives that drive their behavior and decisions in various contexts.

Listener Apprehension

Fear of misunderstanding, misinterpreting, or being unable to adjust to the spoken messages of others.

Presentation

The act of showing, demonstrating, or delivering information to an audience.