Some critics claim the usefulness of the audit report is limited because:
A) Auditors do not examine management's estimates and judgments
B) Language in the audit report relies on subjective evaluations such as what is meant by "reasonable"
C) Transactions examined are based on sampling and other techniques to limit choices of which transactions to audit
D) Auditor's examine all of the company's transactions.

Question

Quizplus · Accepted Answer

The language used in the audit report, particularly the term "reasonable," is subjective and open to interpretation, which can limit the usefulness of the report. The other options are incorrect because auditors do examine management's estimates and judgments (A), audit sampling is a well-established technique that allows auditors to make inferences about the entire population of transactions (C), and auditors do not examine all of a company's transactions (D), but rather a sample that is designed to be representative of the population as a whole.

Some Critics Claim the Usefulness of the Audit Report Is