hich of the following statements about external auditing are correct? i. Profess

Question

hich of the following statements about external auditing are correct? i. Professional ethics prohibit the external auditor from having a direct financial interest in the companies being audited ii. Auditors should be an unbiased, professionally sceptical reviewer of the financial statements ii. Auditors guarantee the accuracy of financial statements iv. Auditors are responsible to render a competent opinion on the fairness of the financial statements V. When financial statements are not presented fairly in accordance with GAAP, auditors will issue a disclaimer Select one: O a. i, ii, ii, v andv O b. i, ii, iv and v c. ii, ii and iv O d. i, ii, and iv US 11/oa PgUp F7 5 R T YUI OP

Explanation / Answer

Solution: Option d. i, ii, and iv

Explanation: External auditors should be independent and not related to the company in any way. The auditor's report is not a guarantee, however must be unbiased in auditing the financial statements. Also an adverse opinion would use language reflecting that the financial statements are not fairly presented in accordance with GAAP

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