Education of financial statement users as to the responsibilities of preparers and auditors of financial statements will _________.
A)reduce the audit expectation gap
B)ensure the auditor will find all material fraud
C)guarantee the future viability of the entity
D)increase audit firm reputation and independence

Question

Quizplus · Accepted Answer

Education of financial statement users about the responsibilities of preparers and auditors of financial statements will reduce the audit expectation gap, which is the difference between the perceived responsibilities of auditors and what they actually do. This can help prevent misunderstandings and unrealistic expectations about the role of auditors, ultimately improving confidence in financial reporting. However, it does not guarantee that all material fraud will be found, ensure future entity viability, or directly increase the reputation and independence of audit firms.

Education of Financial Statement Users as to the Responsibilities of Preparers