Question

2.42 Which of the following recognizes that an audit conducted under generally accepted auditing standards may not detect all material misstatements?

a. absolute assurance
b. professional judgment
c. reliability of audit evidence
d. reasonable assurance

Answer 1

The answer is reasonable assurance, which recognizes that an audit conducted under generally accepted auditing standards may not detect all material misstatements.

Step-by-step explanation:

The correct answer is d. reasonable assurance. Reasonable assurance recognizes that an audit conducted under generally accepted auditing standards may not detect all material misstatements. It is not possible for auditors to provide absolute assurance that there are no material misstatements in the financial statements they audit. They rely on their professional judgment and the evidence gathered during the audit to provide reasonable assurance.