Which of the following is not true about opinion on financial statements?
Correct answer: B. He is responsible for detection and prevention of frauds and errors in financial statements
- A. The auditor should express an opinion on financial statements.
- B. He is responsible for detection and prevention of frauds and errors in financial statements
- C. His opinion is no guarantee to future viability of business
- D. He should examine whether recognised accounting principle have been consistently
Explanation
Management is responsible for preventing and detecting fraud and errors through proper controls, while the auditor provides reasonable assurance through the audit. An audit opinion is not a guarantee of future viability, and the auditor does assess consistency of accounting principles.
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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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