The audit process can be viewed as having two stages.Which of the following statements regarding these stages is FALSE?
A)The two stages reflect the two major categories of audit report reservations: accounting deficiency reservations based on stage one,and audit deficiency reservations based on stage two.
B)The distinction between audit and accounting uncertainties is critical for audit report reservations.
C)Stage one deals with audit evidence uncertainties,those related to the amount of evidence gathered.
D)In stage two,the auditor uses the evidence obtained in stage one to make a determination of the appropriateness of financial reporting relative to GAAP and fairness of presentation criteria.

Question

Quizplus · Accepted Answer

The two stages do not reflect the two major categories of audit report reservations based on accounting or audit deficiencies. Rather, the two stages are (1) obtaining audit evidence and (2) evaluating the audit evidence obtained to reach an opinion on the financial statements. The distinction between audit and accounting uncertainties is critical for audit report reservations, and stage one does deal with audit evidence uncertainties, but stage two involves more than just a determination of the appropriateness of financial reporting and fairness of presentation.

The Audit Process Can Be Viewed as Having Two Stages