What is meant by negative assurance?
Correct answer: D. The auditor did not find anything to indicate that a material misstatement exists.
- A. The auditor cannot give an opinion due to lack of evidence.
- B. The client's financial statements were found to be materially misstated.
- C. The auditor could not conduct any tests due to lack of controls.
- D. The auditor did not find anything to indicate that a material misstatement exists.
Explanation
Negative assurance means the auditor states that nothing came to attention indicating a material misstatement, rather than giving the positive assurance provided by a full audit opinion. It is commonly associated with review engagements.
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About Auditing
Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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