ACCA Audit and Assurance (F8) Practice Exam

What should the final review of financial statements ensure?

1. That they are consistent with industry trends

2. That they reflect management's wishes

3. That they are reasonable and consistent with evidence

4. That they are presented in a visually appealing manner

The correct answer is: That they are reasonable and consistent with evidence

The final review of financial statements plays a crucial role in ensuring the integrity and reliability of the information presented to stakeholders. The focus on ensuring that the financial statements are reasonable and consistent with evidence is paramount. This means that the figures presented within the statements align with the underlying financial data and supporting documentation obtained during the audit process. In this context, ensuring reasonableness also involves verifying that the accounting policies have been applied consistently and that there are no significant discrepancies or anomalies that would raise questions about the accuracy of the financial reporting. This review acts as a safeguard, confirming that the statements not only adhere to applicable accounting standards but also present an accurate picture of the company's financial performance and position based on the audit evidence collected. While considering other aspects, such as consistency with industry trends or management preferences, could be relevant in specific contexts, they do not carry the same weight in the context of a thorough audit review. Therefore, the emphasis on reliability and consistency with substantiated evidence is what fundamentally validates the financial statements in a robust audit process.