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Which principle is NOT typically associated with audit reporting according to the AICPA?

  1. Auditors must evaluate internal controls

  2. Auditors must state if the financial statements are in full compliance with GAAP

  3. Audit reports should express an opinion on the financial statements

  4. Auditors must communicate any material weaknesses

The correct answer is: Auditors must state if the financial statements are in full compliance with GAAP

The assessment that auditors must state if the financial statements are in full compliance with GAAP is not typically associated with audit reporting standards as set forth by the AICPA. Instead, auditors are responsible for expressing an opinion on whether the financial statements present a true and fair view in accordance with generally accepted accounting principles (GAAP). The nature of an audit report is to provide an opinion regarding the financial statements as a whole, rather than claiming absolute compliance with GAAP. This is important because absolute assurance or guarantees cannot be provided; rather, audits assess whether the financial statements are free from material misstatements, which may arise from errors or fraud. Therefore, a statement of full compliance as an absolute makes it inconsistent with the normal wording of auditor opinions. In contrast, the requirement for auditors to evaluate internal controls, express an opinion on the financial statements, and communicate any material weaknesses are all fundamental principles that underlie the audit process. They emphasize not only the need to assess the reliability of the information presented in financial statements but also to ensure that any potential discrepancies within internal controls are appropriately highlighted in the audit report.