Final answer:
The statement is true; the contents of the auditor's report are indeed guided by the performance principle of GAAS. The performance principle helps ensure that audits are conducted with diligence, skepticism, and sufficient evidence—standards that influence the final audit report.
Step-by-step explanation:
The statement that the contents of the auditors' report are guided by the performance principle of GAAS (Generally Accepted Auditing Standards) is true. The performance principle is one of the critical aspects of GAAS, which sets the guidelines for the planning, execution, and supervision of the audit. The auditor's report is a communication at the culmination of the auditing process that includes the auditor's opinion on whether the financial statements are presented fairly, in all material respects, in conformity with the applicable financial reporting framework.
The performance principle under GAAS mandates that auditors must plan and perform the audit with due professional care, maintain skepticism, and obtain sufficient appropriate audit evidence. These guidelines ensure that the audit is conducted in a manner that will minimize the risk of material misstatement, which in turn informs the auditor's report. Therefore, auditors follow their professional standards, including GAAS, to ensure the audit is performed effectively and the report appropriately reflects the results of the audit process.