Auditing and EthicsQuestion 5653 of 212
All Questions

2. Which of the statements included by Rahul in revised draft engagement letter is incorrect?

Options

AStatement 1 AUDITING AND ETHICS
BStatement II
CStatement III
DStatement IV (2 Marks)
For any discrepancies in this question, email contact@cadada.in

Correct Answer

Option CStatement III

All Options:

  • AStatement 1 AUDITING AND ETHICS
  • BStatement II
  • CStatement III
  • DStatement IV (2 Marks)

Ad

Detailed Solution & Explanation

According to SA 210, "Agreeing the Terms of Audit Engagements", the preparation of financial statements in accordance with the applicable financial reporting framework is the primary responsibility of management and those charged with governance, not the auditor.
Statement III incorrectly states that it is the responsibility of the auditor to prepare the financial statements, which violates the fundamental principles of auditor independence and responsibilities.
Hence, **Option C** is the correct answer.

More Questions from Auditing and Ethics

Ready to Master Auditing and Ethics?

Practice all 212 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free