Question

Which of the following is an accurate statement regarding presentation and disclosure?

A) Auditors generally set the risk as low that all required information may not be completely disclosed in the footnotes.
B) Audit tests performed in earlier audit phases provides sufficient appropriate evidence about contingent liabilities and subsequent events.
C) Auditors do not conduct tests of controls related to disclosures when the initial assessment of control risk is below maximum.
D) In phase IV (completing the audit), auditors evaluate whether the overall presentation of the financial statements and related footnotes complies with accounting standards.

Answer 1

The correct statement regarding presentation and disclosure is that in the final audit phase, auditors check for compliance of financial statements and footnotes with accounting standards.

Step-by-step explanation:

The statement D) In phase IV (completing the audit), auditors evaluate whether the overall presentation of the financial statements and related footnotes complies with accounting standards is the accurate statement regarding presentation and disclosure. This phase is crucial for ensuring the financial statements as a whole are fair and in accordance with relevant accounting frameworks, including proper disclosure of all necessary information. Auditors must ensure that the information presented in the footnotes is complete and accurate, and that the financial statements reflect the true financial position and performance of the entity.