The auditor's BEST defence when material misstatements are NOT uncovered in the audit is that:
A) the audit was conducted in accordance with Australian accounting standards.
B) the audit was conducted in accordance with auditor judgement.
C) the audit was conducted in accordance with Australian auditing standards.
D) misstatements are the responsibility of management.

Question

Quizplus · Accepted Answer

Conducting the audit in accordance with Australian auditing standards is the best defence for the auditor when material misstatements are not uncovered. These standards provide guidance and requirements for auditors to follow in order to ensure their work is thorough and reliable. While misstatements are ultimately the responsibility of management, the auditor has a responsibility to perform their audit with due care and diligence. Conducting the audit in accordance with these standards demonstrates that the auditor fulfilled their obligations and reduces the likelihood of liability in the event that misstatements occur.

The Auditor's BEST Defence When Material Misstatements Are NOT Uncovered