CA Inter P5 · Chapter 1 · Question 7 of 10
The managing director of Sitara Fabrics Ltd. states at a board meeting: 'Since our accounts are audited, any error in them is the responsibility of the auditor.' This view is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Incorrect, because the audit of financial statements does not relieve management or those charged with governance of their responsibility for preparing the financial statements
Explanation
The preparation of financial statements in accordance with the applicable financial reporting framework is the responsibility of management, with oversight by those charged with governance. The auditor's responsibility is to express an opinion on them. The audit does not relieve management of its responsibility, whether the misstatement arises from error or fraud.
More Nature, Objective and Scope of Audit MCQs
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