Please based on these sections below to find the answer. Thank you.

$$ AU$-$C Section $300$ Planning an Audit.

$$ AU$-$C Section $700$ Forming an Opinion and Reporting on Financial Statements.

$$ AU$-$C Section $230$ Audit Documentation.

$$ AU$-$C Section $560$ Subsequent Events.

$$ AU$-$C Section $240$ Consideration of Fraud in a Financial Statement Audit.

$$ AU$-$C Section $200$ General Principles and Responsibilities.

$$ AU$-$C Section $315$ Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement.

$$ AU$-$C Section $705$ Modification to the Opinion in the Independent Auditor$$s Report. You have recently resigned your position as an audit manager with a Big Four accounting and audit firm and joined a small local firm, Jones CPA $($Jones$)$ as a partner. Soon after this transition, the managing partner of Jones, Diane, asked you to accompany her and other partners to Piedmont Company

$($Piedmont$),$ a local and privately owned manufacturer of pet foods, to be a part of the presentation for Jones to be appointed as the new auditors for Piedmont.

The presentation goes extremely well, and you have been very impressed with your partners and are excited about the possibility of Piedmont being added to the audit practice of Jones. Just as you are leaving the meeting, you overhear parts of a conversation between a Jones tax partner and the Company$$s VP of

Finance. Although you do not hear the entire conversation you clearly heard the VP of Finance say to your tax partner Phil, $$is Jones large enough to pay up if your accountants make a mistake in preparing our financial statements?$$

On the ride back to the office, you and Diane immediately talk about this conversation. Diane heard it too, and she adds that Phil$$s response was that $$Jones is large enough to stand behind all of our work$.$

Required:

What fundamental premise of an audit of financial statements do the Piedmont VP of Finance and the Jones tax partner appear to significantly misunderstand?