Compare and contrast management\'s responsibility for the entity\'s financial statements with the auditor\'s responsibilities for detecting errors and fraud in the financial statements
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Accounting
- Management is responsible to prepare financial statements that fairly present the company's financial condition and operations in accordance with established accounting standards.
- The auditor is responsible to issue an opinion in regards to the financial statements prepared by management.
- In order to issue this opinion, the auditor must plan and perform the audit in accordance with established standards to obtain reasonable assurance that the financial statements are free of material misstatement, whether caused by error or fraud.
need an explanation for this answer? contact us directly to get an explanation for this answer(Note that the auditor's opinion explicitly states that the financial statements are the responsibility of management.)
However, it is important to note that an auditor's unqualified opinion does not mean that errors or fraud do not exist but rather that there is reasonable assurance that they do not exist in material amounts.