Auditing standards make it clear that the auditor is responsible for identifying and deciding the appropriate accounting treatment for contingent liabilities due to the complexity of this topic.

Question

Quizplus · Accepted Answer

Auditing standards require the auditor to assess the appropriateness of management's use of accounting principles and their application in the financial statements, including the accounting for and disclosure of contingent liabilities, but it is management's responsibility to identify and decide the appropriate accounting treatment for contingent liabilities.

Auditing Standards Make It Clear That the Auditor Is Responsible