The audit report indicates that (1) management is responsible for the content of the financial statements and (2) the auditor is responsible for evaluating the appropriateness of the accounting principles chosen by management. Which paragraph contains those statements?
A) Both are in the opinion paragraph.
B) Both are in the management's responsibility paragraph.
C) Both are in the introductory paragraph.
D) None of the above are true.

Question

Quizplus · Accepted Answer

The management's responsibility paragraph contains the statement about management's responsibility for the financial statements, while the auditor's responsibility paragraph contains the statement about the auditor's responsibility for evaluating the appropriateness of accounting principles.

The Audit Report Indicates That (1) Management Is Responsible for the Content