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 overall fairness of the presentation of financial position, results of operations and cash flows is assessed within the agreed reporting framework, which includes the accounting standards and other reporting requirements applicable to the financial statements. The auditor's judgment is based on whether the financial statements comply with the requirements of the reporting framework. Therefore, choice C is the best answer. Choice A is incorrect, as the Australian auditing standards only provide guidance on how to apply the concept of materiality. Choice B is also incorrect, as quality control pertains to the policies and procedures implemented by the audit firm to ensure that audits are conducted in accordance with professional standards. Choice D is not relevant to the auditor's judgment concerning the overall fairness of the financial statements.

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