Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

For obtaining reasonable assurance, what should an auditor do?

1. Plan the work properly and supervise assistants.

2. Examine all evidence supporting management's claims.

3. Design the audit to detect every illegal act.

4. Ensure no fraudulent activities are concealed.

The correct answer is: Plan the work properly and supervise assistants.

To obtain reasonable assurance in an audit, proper planning and supervision of the audit work are crucial. This process involves outlining the audit approach, identifying the necessary resources, and establishing a timeline for completion. By thoroughly planning the audit, auditors can effectively allocate tasks, manage risks, and ensure that their work is effective and efficient. Supervising assistants is equally important, as it ensures that the audit procedures are carried out correctly and that the quality of the work meets the required standards. Through effective supervision, auditors can provide guidance and oversight, which helps to improve the accuracy of the findings and conclusions drawn during the audit. While examining evidence supporting management's claims is necessary, doing so for all evidence is impractical and does not align with the concept of reasonable assurance. An audit does not require the examination of every piece of evidence, but rather a representative sampling that provides a basis for an informed opinion. Similarly, designing the audit to detect every illegal act or ensuring that no fraudulent activities are concealed goes beyond the scope of obtaining reasonable assurance. Auditors strive for a high level of assurance, but they acknowledge that it is impossible to detect every instance of fraud or illegal activity, particularly when management may be involved in concealing such actions. Thus, the focus is