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CMA Intermediate · Corporate Accounting and Auditing · Nature, Scope, Objectives and Significance of Auditing

Which of the following is NOT an objective of auditing but rather a responsibility of the company's management?

Establishing internal controls to prevent and detect fraud is management's responsibility, not an audit objective. The auditor obtains sufficient appropriate evidence, expresses an opinion and reports on matters such as books of account, but does not design or operate the client's control system.

  1. AEstablishing internal controls to prevent and detect fraudCorrect
  2. BObtaining sufficient appropriate audit evidence
  3. CExpressing an opinion on the financial statements
  4. DReporting on whether proper books of account have been kept

Explanation

Management and those charged with governance are responsible for designing and maintaining internal control to prevent and detect fraud and for preparing the financial statements. The auditor's role is to obtain evidence, form an opinion and report, not to establish the entity's controls.

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