ACCA Audit and Assurance (F8) Practice Exam

Which of the following are included in "Explicit Opinions"?

1. Conjectural analysis

2. True and Fair representation

3. Philosophical assertions

4. Market-based evaluations

The correct answer is: True and Fair representation

The term "Explicit Opinions" refers to clear, definitive statements made by auditors regarding the financial statements of an entity. Among the options, "True and Fair representation" is the correct choice because it encapsulates the fundamental objective of an audit report. An auditor expresses an opinion that the financial statements present a true and fair view of the company’s financial position, results of operations, and cash flows, which is essential for stakeholders to make informed decisions. In an audit context, an explicit opinion is expected to be unambiguous and supported by the evidence collected during the audit process. This ensures that the users of the financial statements can rely upon the auditor's credibility and the integrity of the reported results. The other options represent concepts that do not align with the idea of explicit opinions in auditing. Conjectural analysis involves speculation and is not a definitive statement; philosophical assertions lack the concrete basis required in auditing; and market-based evaluations are typically external assessments that do not constitute a direct opinion on the financial statements themselves.