Management's assertions in the financial statements are of relevance to the audit process because:
A)they are the procedures that will be performed by the audit team.
B)they are utilized by auditors in developing proper tests and procedures.
C)they are direct evidence that management has prepared financial statements in accordance with generally accepted audit standards.
D)they relate more to the audit while the financial statements belong to the auditor.

Question

Quizplus · Accepted Answer

Management's assertions in the financial statements provide a framework for auditors to design their audit approach and develop appropriate audit tests and procedures. These assertions help auditors to assess the completeness, accuracy, and validity of the financial statements, as well as to identify any potential risks of material misstatement. However, management's assertions do not serve as direct evidence that the financial statements are prepared in accordance with generally accepted accounting principles.

Management's Assertions in the Financial Statements Are of Relevance to the Audit