The audit risk model (ARM) that is being used on a worldwide basis to underpin the audit risk of companies, is often being criticized. .04 The auditor’s determination of materiality is a matter of professional judgment and is affected by the auditor’s perception of the financial information needs of users of the financial statements. D) comparative analysis. C) reasonable assurance. concept of reasonable assurance and provides information to consider in deciding whether that concept is articulated with sufficient clarity and whether the standard of reasonable assurance is an appropriate level of auditor responsibility for the detection of material misstatements and for evaluating other areas of auditor performance. There are a few different types of audit but, in the specific context of professional services, an audit is usually financial.It is intended to provide reasonable assurance, but not absolute assurance, that the financial statements give a true and fair view in accordance with the financial reporting framework. 9) The concept of reasonable assurance indicates that the auditor is: A) not a guarantor of the correctness of the financial statements. The auditor obtains and evaluates audit evidence to obtain reasonable assurance about whether the financial statements give a true and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting framework. It also assesses cost. Diff: Easy. Objective: LO 3-1. a. not an insurer of the correctness of the financial statements. Reasonable assurance is important because it gives directions on the valuations of the soundness and dependability of the financial reports by auditors. .13 Since the auditor's opinion on the financial statements or internal control over financial reporting is based on the concept of obtaining reasonable assurance, the auditor is not an insurer and his or her report does not constitute a guarantee. Provide reasonable assurance that the financial statements are not materially misstated because of fraud 18. The core contribution, to repeat, lies in the effects of the audit process … possibility for the auditor to not reveal all material shortcomings in the presentation (Detection risk). b. the establishment and maintenance of a system of internal control is an important responsibility of management, not of the auditor. Purpose - Though assurance services framework has been defined in the Auditing Standards, the understandability of the concept of reasonable assurance are varied by different auditors. It is the responsibility of the auditor to obtain reasonable assurance by conducting audit engagement and expressing his opinion in the audit report. Answer: A The concept of reasonable, but not absolute, assurance indicates that the auditor is not an insurer or guarantor of the correctness of the finan - cial statements. An internal auditor is likely to be more concerned with _________________ than the external auditor. The concept of reasonable assurance describes a mental attitude that the auditor gains from the conclusions drawn from audit examination findings. Reasonable assurance refers to the auditing system in the USA and it is the level of confidence which describes that the financial statements which are not misstated are to be carefully and skillfully handled by a professional auditor during an audit. In the process of providing reasonable.assurance that financial statements are fairly presented, an auditor assesses whether:.