Question

Which one of the following is false regarding the adequacy of disclosures in a financial statement audit?

a. The auditor should consider matters for disclosure while gathering evidence during the course of the audit, not just at the end of the audit.

b. One of the key disclosures is a summary of significant accounting policies used by the company.

c. Disclosures should be limited to only checklist items.

d. The auditor's report does not specifically cover the statements made by management in the "Management Discussion and Analysis" (MD&A) section of the annual report.

Answer 1

Option c is false. Disclosures should not be limited to only checklist items in a financial statement audit.

Step-by-step explanation:

The false statement regarding the adequacy of disclosures in a financial statement audit is option c: Disclosures should be limited to only checklist items. In a financial statement audit, the auditor should consider matters for disclosure throughout the audit process, not just at the end. One of the key disclosures is a summary of significant accounting policies used by the company, as stated in option b. Additionally, the auditor's report does not specifically cover the statements made by management in the 'Management Discussion and Analysis' (MD&A) section of the annual report, as mentioned in option d.