The auditor must determine whether the transactions recorded in the revenue and expense accounts during the year
A)have been properly recorded in accordance with GAAS
B)have been recorded in accordance with an applicable financial reporting framework
C)are capable of being transferred to the owners equity account
D)have comparable transactions on the balance sheet

Question

Quizplus · Accepted Answer

The auditor's main objective is to determine whether the financial statements are presented in accordance with an applicable financial reporting framework. Therefore, the transactions recorded in the revenue and expense accounts should be reviewed to ensure that they have been recorded in accordance with the financial reporting framework chosen by management. The auditing standards do not require the auditor to determine whether the transactions have been properly recorded in accordance with GAAS, nor do they require the auditor to determine if the transactions have comparable transactions on the balance sheet or if they are capable of being transferred to the owners' equity account.

The Auditor Must Determine Whether the Transactions Recorded in the Revenue