Which one of the following statements is true?
A) The auditor's objectives follow and are closely related to management assertions.
B) Assertions about presentation and disclosure deal with whether the accounts have been included in the financial statements at appropriate amounts.
C) Management's assertions follow and are closely related to the auditor's objectives.
D) The auditor's primary responsibility is to find and disclose fraudulent management assertions.

Question

Quizplus · Accepted Answer

The auditor's objectives are closely related to management assertions, as the auditor's job is to obtain sufficient evidence to support or refute the management assertions. The auditor's objectives include assertions about completeness, existence, rights and obligations, valuation and accuracy, and presentation and disclosure. The auditor's job is not to find and disclose fraudulent management assertions (option D). Assertions about presentation and disclosure (option B) deal with whether the financial statements have been properly presented and disclosed, not whether the accounts were included at appropriate amounts. Therefore, option A is the correct statement.

Which One of the Following Statements Is True