In the auditor's responsibility paragraph of the audit report, the use of the term 'reasonable assurance' is intended to indicate that:
A) no misstatements exist in the financial statements.
B) there is a possibility that material misstatements still exist in the financial statements.
C) no material misstatements exist in the financial statements.
D) there is a possibility that immaterial misstatements still exist in the financial statements.

Question

Quizplus · Accepted Answer

The use of the term 'reasonable assurance' in the auditor's responsibility paragraph indicates that there is a possibility that material misstatements still exist in the financial statements, but the auditor has conducted the audit in accordance with the auditing standards and obtained sufficient evidence to provide reasonable assurance that the financial statements are free from material misstatements. Therefore, the realistic expectation is that there may still be material misstatements in the financial statements even after the audit has been conducted.

In the Auditor's Responsibility Paragraph of the Audit Report, the Use