Question

Which of the following is true with respect to the auditor's report?

A. The report indicates that the company's financial statements were audited in accordance with generally accepted accounting standards.
B. The report indicates that the company's financial statements were audited in accordance with applicable auditing standards.
C. The report indicates that the company's financial statements were audited in accordance with the auditor's best judgment.
D. The report indicates that the company's financial statements were audited in accordance with statements issued by the FASB.

Answer 1

Option B is true with respect to the auditor's report as it indicates that the company's financial statements were audited in accordance with applicable auditing standards.

Step-by-step explanation:

The correct option with respect to the auditor's report is B. The report indicates that the company's financial statements were audited in accordance with applicable auditing standards.

When an auditor performs an audit, they follow a set of standards known as Generally Accepted Auditing Standards (GAAS). These standards are set by professional auditing organizations and provide guidelines for the conduct of the audit.

Therefore, the statement in option B is true as it aligns with the requirement that the financial statements are audited in accordance with applicable auditing standards.