1. Multiple Choice: What is the primary objective of an audit of financial statements? A) Detection and prevention of fraud B) Assurance of absolute accuracy of the financial statements C) Expression of an opinion on the fairness of the financial statements D) Compliance with the legal requirements Correct Answer: C) Expression of an opinion on the fairness of the financial statements Rationale: The main objective of an audit is to provide reasonable assurance that the financial statements are free of material misstatement, whether caused by fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework. 2. True/False: The auditor's responsibility extends to detecting all instances of fraud during an audit. Answer: False Rationale: While auditors are required to maintain professional skepticism and consider the risk of material misstatement due to fraud, they are not respo