An audit performed in accordance with generally accepted auditing standards should:
A)Be expected to provide absolute assurance that noncompliance with all laws will be detected where internal control is effective.
B)Be relied upon to disclose violations of truth in lending laws.
C)Encompass a plan to actively search for all illegalities which relate to operating aspects.
D)Not be relied upon to provide absolute assurance that all noncompliance with laws will be detected.

Question

Quizplus · Accepted Answer

An audit performed in accordance with generally accepted auditing standards is designed to provide reasonable assurance, not absolute assurance, that financial statements and related disclosures are free from material misstatement. Similarly, an audit is not designed to detect all noncompliance with laws and regulations; rather, the auditor's focus is on identifying material noncompliance that could have a significant financial impact or create a reputational risk for the audited entity. Therefore, Choice D is the best answer.

An Audit Performed in Accordance with Generally Accepted Auditing Standards