Which of the following is correct regarding the responsibilities for the quality of accounting principles used in
Question:
Which of the following is correct regarding the responsibilities for the quality of accounting principles used in a company’s annual financial statements?
I. Financial statements are the representations of management, thus management has only to ensure that the statements meet the literal definition of GAAP.
II. If the financial statements are fairly presented in accordance with GAAP, the auditor needs to give an unqualified opinion even if the auditor believes that other accounting treatments would have led to a higher-quality financial statement.
III. The auditor needs to communicate with the audit committee his or her assessment of the overall quality of the financial presentation, even if the financial statements are fairly presented in accordance with GAAP.
a. I and I
b. I and II
c. III only
d. II and III
Step by Step Answer:
Auditing Concepts For A Changing Environment With IDEA Software
ISBN: 9780324180237
4th Edition
Authors: Larry E. Rittenberg, Bradley J. Schwieger