An audit of the financial report of Campbell Ltd, an Australian listed company, is being conducted by an external auditor.The external auditor is expected to:
A)express an opinion as to the attractiveness of Campbell for investment purposes.
B)express an opinion as to whether the financial report is prepared in accordance with an applicable financial reporting framework.
C)make a 100% examination of Campbell's records.
D)certify the correctness of Campbell's financial report.

Question

Quizplus · Accepted Answer

The external auditor is expected to express an opinion as to whether the financial report is prepared in accordance with an applicable financial reporting framework. This is the main purpose of an audit – to provide reasonable assurance to users of the financial statements that they are free from material misstatement and prepared in accordance with the relevant financial reporting framework. Expressing an opinion on the attractiveness of the company for investment purposes is not within the scope of an external audit. Making a 100% examination of Campbell's records is not practical or feasible, as audits are performed using sampling techniques. Certification of the correctness of Campbell's financial report is not the responsibility of the external auditor, as they provide only reasonable assurance and not absolute assurance.

An Audit of the Financial Report of Campbell Ltd, an Australian