An audit of a financial report by the contracted auditors will give absolute assurance that the financial reports give a true and fair view of the financial performance of the entity.

Question

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An audit can provide reasonable assurance, but not absolute assurance, that financial statements give a true and fair view of the financial performance of an entity. Absolute assurance is impossible because audits are conducted on a test basis and are subject to inherent limitations such as the possibility of material misstatements going undetected due to factors such as fraud or collusion.

An Audit of a Financial Report by the Contracted Auditors