The auditor's best defense when material misstatements are not uncovered is to have conducted the audit
A) in accordance with generally accepted auditing standards.
B) as effectively as reasonably possible.
C) in a timely manner.
D) only after an adequate investigation of the management team.

Question

Quizplus · Accepted Answer

Conducting an audit in accordance with generally accepted auditing standards (GAAS) is the auditor's best defense when material misstatements are not uncovered. GAAS provides guidelines on how an audit should be planned, performed, and reported to achieve the objectives of the audit. If the auditor follows GAAS and documents their work, then they can prove that they conducted the audit with due diligence and care, even if material misstatements were not uncovered. The other options (B, C, and D) are important considerations for conducting an effective audit, but they are not the best defense for material misstatements not being uncovered.

The Auditor's Best Defense When Material Misstatements Are Not Uncovered