Which of the following underlies the application of generally accepted auditing standards, particularly the standards of fieldwork and reporting?
A. The element of internal control.
B. The element of reasonable assurance.
C. The element of corroborating evidence.
D. The elements of materiality and audit risk.
Answer:D
D is corrent because the elements of materiality and audit risk underlie the application of all the standards, particularly the standards of fieldwork and reporting.
A is incorrect because internal control does not underlie all GAAS but rather deals specifically with the second fieldwork standard.
B is incorrect because reasonable assurance is a basic concept of internal control which recognizes that the cost of internal control should not exceed the benefits expected to be derived.
C is incorrect because corroborating evidence is required to be gathered but does not underlie all GAAS. Corroborating evidence addresses the third fieldwork standard directly.