QUESTION 3 The maximum amount by which the auditor believes the financial statements could be misstated and still not affect the decisions of users. This is a definition of: a. Engagement risk b. Overall Materiality c. Tolerable misstatement. d. Risk of material misstatement QUESTION 4 Which of the following best describes the general character of the section of the Principles Undertying an Audit of Financial Statements," titled "Performance"? a. The need to maintain an independence of mental attitude in all matters relating to the audit b. Description of the competence, Independence, and professional care of persons performing the audit. Criteria for audit planning and evidence gathering. d. Criteria for the content of the auditor's report on financial statements and related footnote disclosures QUESTIONS Which of the following statements best describes management's and the external auditor's respective levels of responsibility for a public company's financial statements? a. Management and the external auditor share equal responsibility for the fairness of the entity's financial statements in accordance with GAAP b. Management has the primary responsibility to ensure that the company's financial statements are prepared in accordance with GAAP, and the auditor provides a guarantee that the statements are free of material misstatement cNeither management nor the external auditor has significant responsibility for the faimess of the entity's financial statements in accordance with GAAP. d. Management has the primary responsibility to ensure that the company's financial statements are prepared in accordance with GAAP, and the auditor provides reasonable assurance that the statements are free of material misstatement