Question

Which of the following is a change that is not being debated by auditing standard setters and investors?

a. Adding disclosure about which engagement partner at the firm supervised the audit and who from outside the audit firm participated in the audit
b. Adding commentary on areas of risk of material misstatement of the financial statements identified by the auditor.
c. Adding commentary about the level of materiality applied by the auditor to perform the audit.
d. All of the above are being debated.

Answer 1

The correct answer is d. All of the options listed (disclosure about engagement partner, commentary on risks, and commentary on materiality level) are being debated within the auditing community in order to enhance the audit report's usefulness and reliability.

Step-by-step explanation:

The question is related to auditing and specifically to the changes being considered by auditing standard setters and investors. Answering the student's question:

All of the options presented (a, b, and c) are indeed topics that are subject to ongoing debate within the auditing community. Therefore, the correct answer is:

d. All of the above are being debated.

• Disclosures about the engagement partner and participants in the audit are being debated to enhance accountability and transparency.
• Commentary on areas of risk of material misstatement is being considered to give users of the financial statements a better understanding of where the auditors focused their efforts and the potential areas of concern.
• Commentary about the level of materiality applied by the auditor is also a topic of debate, intended to inform users of the financial statements about the sensitivity of the audit to the size of errors or omissions.

These proposed changes aim to improve the usefulness and reliability of the audit report for users.