Which of the following is correct statement?Select one:a.The auditor should use professional judgment to assess audit risk and to design audit procedures to ensure it is eliminated.b.The auditor is an insurer, and his or her report constitutes a guarantee.c.The subsequent discovery that a material misstatement exists in the financial statements is evidence of inadequate planning, performance, or judgment on the part of the auditor.d.The auditor should obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach.

One way of exercising judgment in the conduct of the work of an auditor is through deciding the extent of audit procedures and in assessing the reasonableness of the judgment and estimates made by the management in preparing the financial statements.Select one:TrueFalse

Which statement is incorrect regarding obtaining an understanding of the entity and its environment?Select one:a.The auditor's primary consideration is whether the understanding that has been obtained is sufficient to assess the risks of material misstatement of the financial statements and to design and perform further audit procedures.b.That understanding establishes a frame of reference within which the auditor plans the audit and exercises professional judgment about assessing risks of material misstatement of the financial statements and responding to those risks throughout the audit.c.Obtaining an understanding of the entity and its environment is an essential aspect of performing an audit in accordance with PSAs.d.The depth of the overall understanding that is required by the auditor in performing the audit is equal to that possessed by management in managing the entity.

Analytical procedures used in planning an audit should focus onSelect one:a.Providing assurance that potential material misstatements will be identified.b.Assessing the adequacy of the available evidential matter.c.Enhancing the auditor's understanding of the client's business.d.Reducing the scope of tests of controls and substantive tests.

These are the requirements for an audit of financial statements, as set forth by the professional standards, exceptSelect one:a.Professional Skepticismb.Sufficient Appropriate Audit Evidencec.Departing from some standards that is beneficial to the clientd.Professional JudgmentClear my choice

An auditor may not express a qualified opinion whenSelect one:a.An accounting principles at variance with generally accepted accounting principles is used.b.The auditor lacks independence with respect to the audited entity.c.The auditor's report refers to the work of a specialist.d.A scope limitation prevents the auditor from completing an important audit procedure.