Question

In: Accounting

When an auditor expresses an opinion on the financial report, the auditor’s responsibilities extend to: a....

When an auditor expresses an opinion on the financial report, the auditor’s responsibilities extend to:

a. Expressing an opinion on the appropriateness of the entity’s business risk profile.

b. Expressing an opinion on whether the entity’s results are fairly presented in the financial report.

which answer is correct and which is incorrect and give reasons for both accordingly.?

Solutions

Expert Solution

1)

Audit is an independent examination of the financial statements of an entity whether they are showing true and fair view of its state of affairs and misstatements if any are at an acceptable a low level.

2)

The primary objective of audit is to express their opinion on the financial statements.

3)

It is not the primary objective of the audit to check the appropriateness of the entity's business risk profile.

Option B is correct.

Explanation: Points 1) & 2)

Option A is incorrect.

Explanation: Point 3)


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