Auditing and Attestation - Certified Public Accountant (CPA) Practice Exam 2026 - Free CPA Practice Questions and Study Guide

To obtain a level of assurance that financial statements are free from material misstatement, it is essential for the auditor to plan the work and supervise any assistants. Proper planning involves understanding the entity and its environment, including its internal controls, which helps the auditor identify and assess the risks of material misstatement. This foundational step informs the nature, timing, and extent of audit procedures to be performed.

Additionally, supervising assistants is crucial to ensure that the audit work is carried out effectively and in accordance with professional standards. This oversight helps maintain the quality of the audit, facilitates communication, and addresses any issues that might arise during the audit process. Together, planning and supervision are key components of conducting a thorough audit and supporting the overall reliability of the auditor's conclusions regarding the financial statements.

While obtaining absolute assurance might seem ideal, it is not achievable due to inherent limitations in any audit process, including sampling risk and potential human error. Conducting investigations into employee activities may be a part of auditing but is not a general requirement for obtaining assurance on financial statements. Describing the financial reporting framework, while important, does not directly impact the auditor's ability to assess the risk of material misstatement.