The existence of audit risk is recognized by the statement in the auditor's standard report that the auditor
A)Obtains reasonable assurance about whether the financial statements are free of material misstatement.
B)Assesses the accounting principles used and also evaluates the overall financial statement presentation.
C)Realizes some matters, either individually or in the aggregate, are important while other matters are not important.
D)Is responsible for expressing an opinion on the financial statements, which are the responsibility of management.

Question

Quizplus · Accepted Answer

The auditor's standard report acknowledges audit risk by stating that the auditor obtains reasonable assurance, not absolute assurance, that the financial statements are free of material misstatement. This implies that there is some level of risk that material misstatements may not be detected.

The Existence of Audit Risk Is Recognized by the Statement