If the auditor determines that informative disclosures are not reasonably adequate,the auditor must identify that fact in the auditor's report.

Question

Quizplus · Accepted Answer

According to the Generally Accepted Auditing Standards (GAAS), if the auditor determines that the informative disclosures in the financial statements are not reasonably adequate, the auditor should include an explanatory paragraph in the auditor's report that explains the deficiencies in the disclosures. This is in compliance with the requirement of GAAS to communicate the inadequacy of disclosures to the users of the financial statements. Therefore, the statement is true, and option A is the correct answer.

If the Auditor Determines That Informative Disclosures Are Not Reasonably