Auditing and Attestation - Certified Public Accountant (CPA) Practice Exam 2025 - Free CPA Practice Questions and Study Guide

When an auditor is tasked with auditing a single financial statement, it is essential for them to assess the reliability of the presented information. This step is crucial because the auditor needs to ensure that the financial statement is both accurate and free from material misstatements, whether caused by error or fraud.

The reliability of the information involves evaluating the sources from which the data has been obtained, the processes used to compile the information, and the overall framework of the financial statement. This includes understanding the relevant accounting principles that apply to that specific financial statement and ensuring that the information presented is consistent, verifiable, and reflects true economic reality.

In contrast, reviewing all financial statements for accuracy might be necessary for a comprehensive audit but isn't a prerequisite when focusing solely on one statement; therefore, it doesn't hold the same priority in this context. Similarly, requiring management to adjust irrelevant financial items and determining client-specific accounting policies are actions that may arise during the audit process but are not prerequisites for establishing the reliability of the data within that single financial statement. Thus, assessing the reliability of the presented information serves as a foundational step that directly impacts the auditor's ability to issue an opinion on that particular financial statement.