Problem

Which of the following statements concerning noncompliance by clients is correct?A. An aud...

Which of the following statements concerning noncompliance by clients is correct?

A. An auditor’s responsibility to detect noncompliance that has a direct and material effect on the financial statements is the same as that for errors and frauds.

B. An audit in accordance with generally accepted auditing standards normally includes audit procedures specifically designed to detect noncompliance that has an indirect but material effect on the financial statements.

C. An auditor considers noncompliance from the perspective of the reliability of management’s representations rather than their relation to audit objectives derived from financial statement assertions.

D. An auditor has no responsibility for noncompliance that has an indirect effect on the financial statements.

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