The auditor's responsibility when considering the company's compliance with laws and regulations during an audit of financial statements is
A)to ensure that the company complies with the laws and regulations that affect the company
B)to identify material misstatements that might occur in the financial statements due to noncompliance with laws and regulations
C)to ensure that the company complies with the laws and regulations that might affect the company
D)to identify misstatements that have occurred in the financial statements due to noncompliance with laws and regulations

Question

Quizplus · Accepted Answer

The auditor's responsibility when considering the company's compliance with laws and regulations during an audit of financial statements is to identify any material misstatements that might occur in the financial statements due to noncompliance with laws and regulations. The auditor's primary responsibility is to provide reasonable assurance that the financial statements are free from material misstatement, whether caused by error or fraud. Noncompliance with laws and regulations can lead to material misstatements in the financial statements, which is why the auditor's responsibility is to identify such misstatements. The auditor is not responsible for ensuring the company's compliance with all laws and regulations that might affect the company, but only those that are relevant to the preparation and presentation of the financial statements.

The Auditor's Responsibility When Considering the Company's Compliance with Laws