In the auditor's responsibility paragraph of the audit report, the use of the term 'reasonable assurance' is intended to indicate that:
A) no material misstatements exist in the financial statements.
B) no misstatements exist in the financial statements.
C) there is a possibility that immaterial misstatements still exist in the financial statements.
D) there is a possibility that material misstatements still exist in the financial statements.

Question

Quizplus · Accepted Answer

The term 'reasonable assurance' indicates that while the auditor has conducted the audit in accordance with the appropriate auditing standards, there is still a possibility that material misstatements may exist in the financial statements. Therefore, it is not a guarantee that the financial statements are free from material misstatements.

In the Auditor's Responsibility Paragraph of the Audit Report, the Use