Final answer:
The statement is true as achieving audit quality involves carrying out an audit according to GAAS, providing reasonable assurance the financial statements are in line with GAAP, and ensuring there are no material misstatements due to error or fraud.
Step-by-step explanation:
The statement that audit quality is achieved when the audit is performed in accordance with Generally Accepted Auditing Standards (GAAS) and when it provides reasonable assurance that the financial statements are presented in accordance with Generally Accepted Accounting Principles (GAAP) and are not materially misstated due to errors or fraud is true. GAAS are the standards that guide auditors in the conduct of their audits, ensuring that the audit is systematic, objective, and thorough. Adherence to these standards is crucial in providing high-quality audit results that stakeholders can rely on. On the other hand, GAAP are the commonly accepted set of accounting principles, standards, and procedures that companies use to compile their financial statements. Providing reasonable assurance that financial statements are not materially misstated due to errors or fraud is the very definition of a high-quality audit. However, it is worth noting that while the goal is to minimize risk of material misstatement, absolute assurance is not possible due to inherent limitations in an audit.