If the auditor believes that the financial statements are not fairly stated or is unable to reach a conclusion because of insufficient evidence, the auditor
A) should withdraw from the engagement.
B) should request an increase in audit fees so that more resources can be used to conduct the audit.
C) has the responsibility of notifying financial statement users through the auditor's report.
D) should notify regulators of the circumstances.

Question

Quizplus · Accepted Answer

As per Generally Accepted Auditing Standards (GAAS), the auditor has a responsibility to issue a modified audit report or a disclaimer of opinion if they believe that the financial statements are not fairly stated, or they are unable to reach a conclusion due to insufficient evidence. The auditor should communicate their findings through the auditor's report, notifying financial statement users. Withdrawing from the engagement or requesting an increase in audit fees are not appropriate courses of action in this situation, and notifying regulators would depend on the specific circumstances.

If the Auditor Believes That the Financial Statements Are Not