Which of the Following Statements About Forming an Audit Opinion

question 35

Multiple Choice

Which of the following statements about forming an audit opinion is FALSE?

• A)Auditors need to form an opinion on whether the financial statements are presented fairly in all material respects and in accordance with GAAP.
• B)The auditor must make a number of professional judgments as set out in CAS 700.
• C)The auditor must decide whether the audit team has obtained sufficient appropriate audit evidence providing reasonable assurance that the financial statements as a whole are free from material misstatement due to fraud or error.
• D)The auditor must decide if any uncorrected misstatements are material individually but not in aggregate.

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Definitions:

Budget Committee

A group responsible for coordinating the preparation of the budget, reviewing and approving budget proposals, and monitoring financial performance.

Master Budget

A master budget is a comprehensive financial planning document that combines all of an organization's individual budgets and plans into a single, unified plan.

High-Low Method

A mathematical method that uses the total costs incurred at the high and low levels of activity to classify mixed costs into fixed and variable components.

Mixed Cost

A cost composed of a fixed and a variable component and changes in total with the level of activity, but not proportionally.