QUESTION 2 a) Auditing financial statements is expressing the auditors' opinion on the fairness of the statements, which have been presented fairly. Clarify why auditors use the term 'fair' instead of the terms such as guarantee', 'confirm' or 'correct' over the financial statement that they audit. (10 marks) b) Audit evidence refers to any information used by the auditor to determine whether the information being audited is stated in accordance with established criteria. The information varies greatly in the extent to which it persuades the auditor whether financial statements are fairly stated. ISA 501 deals with specific considerations for selected items by the auditor in obtaining sufficient appropriate audit evidence. This includes getting either the positive or negative confirmation from the clients. Defend why negative confirmation is less reliable compared to positive confirmation. (10 marks) c) ISA 500 states that audit standards require the auditor to accumulate sufficient appropriate evidence to support the opinion issued. Appropriateness is one of the determinants that support the persuasiveness of evidence, particularly when the evidence is relevant and reliable. Explain any TWO (2) characteristics of reliable evidence. (5 marks) (Total: 25 marks)