An audit is not a guarantee that the financial statements are free from material misstatement, because absolute assurance is not attainable. What are the factors which hinders the auditor to provide absolute assurance?

Auditing and Assurance Revision Questions and Answers

Factors hindering the auditor to provide absolute assurance:

Auditor provides reasonable assurance on the financial statements and is not in the position to provide absolute assurance due to the following factors:

i. Use of testing/sampling rather than 100% checking,

ii. The inherent limitations of internal control (for example, the possibility of management override or collusion),

iii. The fact that most audit evidence is persuasive rather than conclusive and

iv. The work undertaken the auditor to form an audit opinion is permeated judgment, in particular regarding: (a) The gathering of audit evidence, for example, in deciding the nature, timing and extent of audit procedures; and (b) The drawing of conclusions based on the audit evidence gathered, for example, assessing the reasonableness of the estimates made management in preparing the financial statements.

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