During the course of the audit engagement, the external auditor suggests an adjustment to the financial statements. The suggestion is accepted by management without argument. This suggests that:
A) the external auditor is primarily responsible for the fairness of the financial statements.
B) the internal auditor has assumed responsibility for the changes made.
C) the external auditor has prepared the financial statements.
D) the client has assumed responsibility for the changes made.

Question

Quizplus · Accepted Answer

The acceptance of the external auditor's suggestion by management indicates that the client (management) has assumed responsibility for the changes made to the financial statements. The external auditor's role is to audit the financial statements prepared by management, not to prepare them or assume primary responsibility for their fairness.

During the Course of the Audit Engagement, the External Auditor