Question

Financial statement audits performed under PCAOB requirements are designed to provide which type(s) of assurance with respect to the detection of material misstatements due to errors or fraud?

Answer 1

Reasonable - Yes Absolute - No

Step-by-step explanation:

When conducting an audit, the auditor is responsible to perform the review and provide reasonable assurance that the financial statements are free of material misstatement.

Due to the type of audit evidence obtained and the attribute of the fraud, the auditor cannot provide absolute assurance that the financial statements are free from any material misstatement, whether due to fraud or error. The assurance provided by the auditor is reasonable and not absolute.