Which of the following statements best describes management's and the external auditor's respective levels of responsibility for a public company's financial statements?

Neither management nor the external auditor has significant responsibility for the fairness of the entity's financial statements.

Management has the primary responsibility to ensure that the company's financial statements are prepared in accordance with IFRS, and the auditor provides a guarantee that the statements are free of material misstatement.

Management and the external auditor share equal responsibility for the fairness of the entity's financial statements in accordance with IFRS.

Management has the primary responsibility to ensure that the company's financial statements are prepared in accordance with IFRS, and the auditor provides reasonable assurance that the statements are free of material misstatement.