An audit designed to provide reasonable assurance of detecting material misstatements resulting from noncompliance with provisions of contracts or grant agreements that have a material and direct effect on the financial statements would be called a(n)
A) performance audit.
B) management audit.
C) operational audit.
D) compliance audit.

Question

Quizplus · Accepted Answer

A compliance audit is designed to provide reasonable assurance of detecting material misstatements resulting from noncompliance with provisions of contracts or grant agreements that have a material and direct effect on the financial statements.

An Audit Designed to Provide Reasonable Assurance of Detecting Material