The known and likely misstatements will be added to the proposed audit adjustment schedule,so that
A)the auditor can consider these misstatements to determine whether the financial statements as a whole are materially misstated
B)the auditor can consider these misstatements in combination with the other misstatements found to determine whether the financial statements as a whole are materially misstated
C)the auditor can consider these misstatements in combination with the other misstatements found to determine whether the financial statements as a whole are fairly presented
D)the auditor can consider these misstatements to determine whether the financial statements as a whole are fairly presented

Question

Quizplus · Accepted Answer

The known and likely misstatements will be added to the proposed audit adjustment schedule so that the auditor can consider these misstatements in combination with the other misstatements found to determine whether the financial statements as a whole are materially misstated. This is because the auditor must evaluate the cumulative effect of all identified misstatements to determine whether they result in a material misstatement in the financial statements as a whole. Therefore, option B is the best choice. Option A is incorrect because determining whether the financial statements as a whole are materially misstated is done by considering all known and likely misstatements, not just those identified on the proposed audit adjustment schedule. Option C is incorrect because the reporting objective is to fairly present the financial statements as a whole, not just to determine whether they are fairly presented. Option D is incorrect because evaluating whether the financial statements are fairly presented involves more than just considering the identified misstatements.

The Known and Likely Misstatements Will Be Added to the Proposed