An audit performed in accordance with generally accepted auditing standards generally should:
A)Be expected to provide absolute assurance that noncompliance with all laws will be detected where internal control is effective.
B)Be relied upon to disclose violations of truth in lending laws.
C)Encompass a plan to actively search for all illegalities which relate to operating aspects.
D)Not be relied upon to provide absolute assurance that all noncompliance with laws will be detected.

Question

Quizplus · Accepted Answer

According to generally accepted auditing standards, an audit cannot provide absolute assurance that all instances of noncompliance with laws and regulations will be detected. The auditor can only provide reasonable assurance by conducting appropriate audit procedures and relying on internal controls. Therefore, the auditor's report should explicitly state that the audit provides reasonable, not absolute, assurance. Choices A, B, and C are not correct because they suggest that the audit can detect all instances of noncompliance, which is not feasible or expected.

An Audit Performed in Accordance with Generally Accepted Auditing Standards