The auditor's judgment concerning the overall fairness of the presentation of financial position, results of operations and cash flows is applied within the framework of:
A) Australian Auditing Standards that include the concept of materiality.
B) quality control.
C) the agreed reporting framework.
D) the auditor's assessment of the audited entity's level of control risk.

Question

Quizplus · Accepted Answer

The auditor's judgment regarding the fairness of financial statements is applied within the agreed reporting framework. This refers to the set of reporting requirements that the audited entity must adhere to when presenting their financial information, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). The auditor must ensure that the financial statements are prepared in accordance with this framework, as well as any other relevant legislation, regulations, or guidelines. The concept of materiality, quality control, and control risk are also important considerations, but they do not have the same direct relationship to the reporting framework as the auditor's judgment of fairness.

The Auditor's Judgment Concerning the Overall Fairness of the Presentation