Management'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 material misstatements that have occurred in the financial statements due to noncompliance with laws and regulations

Question

Quizplus · Accepted Answer

Management is responsible for ensuring that the company complies with the laws and regulations that affect the company. This includes identifying any potential noncompliance issues and taking corrective action as needed. The auditor's role is to assess the effectiveness of management's controls over compliance and to identify any instances of noncompliance that could materially impact the financial statements. Therefore, option A is the best choice.

Management's Responsibility When Considering the Company's Compliance with Laws and Regulations