The primary purpose of an audit is to express an opinion on the ___ of the financial statements.

Accuracy

True or False: Auditing provides absolute assurance that financial statements are free from misstatements.

False. Auditing provides reasonable assurance, not absolute assurance.

Fill in the blank: The scope of an audit includes assessing the ___ and ___ of financial information.

Reliability and sufficiency

What is the role of the auditor concerning the internal controls of an entity?

The auditor evaluates the effectiveness of the internal controls to ensure they provide reliable financial reporting.

True or False: The management is responsible for preparing the financial statements, while the auditor's role is to prepare them.

False. The auditor does not prepare the financial statements; they examine them.

Fill in the blank: An assurance engagement aims to enhance the degree of ___ of the intended users.

Confidence

Fill in the blank: The auditor's opinion is communicated through a ___ report.

Written audit

True or False: An audit can detect all instances of fraud within an entity.

False. While audits can detect fraud, they cannot guarantee that all fraud will be uncovered.

What is the relationship between auditing and accounting?

Auditing reviews the financial statements that are the result of the accounting process.

Fill in the blank: Auditors need to ensure that the financial statements comply with the applicable ___ requirements.

Statutory

What is the significance of the engagement letter in an audit?

The engagement letter formalizes the agreement between the auditor and the client outlining the scope and objectives of the audit.

True or False: Auditors are responsible for the physical condition of the assets they audit.

False. Auditors do not assess the physical condition of assets; that requires specialized skills.