ICAEW ARF · Chapter 1 · Question 5 of 10
Which of the following is NOT an inherent limitation of an audit?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The financial statements are prepared under a recognised financial reporting framework
Explanation
Inherent limitations mean an auditor can give only reasonable, not absolute, assurance. They include the persuasive nature of evidence, the use of sampling and judgement, and the possibility of management override or collusion. Preparing the statements under a recognised framework is a precondition for an audit rather than a limitation, because it provides suitable criteria.
More The concept of and need for assurance MCQs
- Q7Which of the following engagements is NOT an assurance engagement?
- Q8Which of the following statements about an agreed-upon procedures engagement is correct?
- Q9A small company is exempt from statutory audit but its directors are considering a voluntary audit. Which of the following is a genuine…
- Q10Which of the following statements correctly compares reasonable assurance and limited assurance engagements?
- Q1Which of the following is NOT one of the elements of an assurance engagement?