ACCA Advanced Audit and Assurance (AAA) Practice Exam

Which of the following is part of the responsibilities of auditors as stated in the audit report?

1. To ensure the financial statements are profitable

2. To assess the ongoing viability of the business

3. To provide assurance about the accuracy of management's assertions

4. To prepare the financial statements themselves

The correct answer is: To provide assurance about the accuracy of management's assertions

The responsibilities of auditors as outlined in an audit report include providing assurance about the accuracy of management's assertions. This means that auditors perform an independent examination of financial statements and provide an opinion on whether those statements are free from material misstatement. They assess the integrity of financial reporting, evaluating whether the information presented is fairly represented, in accordance with the applicable financial reporting framework. Auditors gather evidence, perform tests, and apply professional judgment to determine the credibility of the financial statements. Their role is to enhance the trustworthiness of the financial information users rely on, such as investors, creditors, and other stakeholders. Therefore, the assurance provided by auditors is crucial for maintaining stakeholder confidence in the financial reporting process. The other options involve responsibilities or statements that do not accurately reflect the primary role of auditors. For instance, ensuring profitability is not within the auditors' responsibilities, as profitability is a management concern. Similarly, while auditors consider the going concern assumption during their evaluations, the ongoing viability of the business is ultimately a management responsibility. Lastly, auditors do not prepare the financial statements; this is the responsibility of management. Instead, their focus is on evaluating the accuracy and fairness of the statements prepared by management.