It is well accepted that throughout the conduct of the ordinary audit it is essential to obtain large amounts of information from management and to rely heavily on$$ management's judgments. After$$ all, the financial statements are$$ management's representations, and the primary responsibility for their fair presentation rests with$$ management, not the auditor. For$$ example, it is extremely$$ difficult, if not$$ impossible, for the auditor to evaluate the obsolescence of inventory as accurately as management can in a highly complex business.$$ Similarly, the collectability of accounts receivable and the continued usefulness of machinery and equipment are heavily dependent on$$ management's willingness to provide truthful responses to questions.

Required

Reconcile the$$ auditor's responsibility for discovering material misrepresentations by management with these comments.

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Part $1$

A$.$

An auditor must rely on management for certain information in the conduct of their audit.$$ However, the auditor must not accept$$ management's representations blindly. The auditor$$ must, whenever$$ possible, obtain competent evidential matter to support the representations of management.

B$.$

An auditor must solely rely on management for certain information in the conduct of their audit.

C$.$

An auditor cannot rely on management for any information in the conduct of their audit. The auditor must obtain competent evidential matter to support the representations of management.

D$.$

An auditor must rely on management for certain information in the conduct of their audit.$$ However, the auditor does not have to accept$$ management's representations blindly. The auditor has the option to obtain competent evidential matter to support the representations of management when they believe it is necessary.