In an engagement to express an opinion on one or more specified elements,accounts,or items of a financial statement,the auditor can generally audit only those specified elements and not the entire set of financial statements.However,the auditor is required to audit the entire set of financial statements if the elements specified include
A) Net Income.
B) Stockholders' Equity.
C) Both A & B.
D) None of the above.

Question

Quizplus · Accepted Answer

If the elements specified include net income and stockholders' equity, then the auditor is required to audit the entire set of financial statements. This is because net income and stockholders' equity are significant elements of the financial statements and are interrelated with other financial statement items. Therefore, auditing only these elements may not provide sufficient evidence on the overall fairness of the financial statements.

In an Engagement to Express an Opinion on One or More