Which of the following best describes the auditor's responsibility with respect to fair values?

Choice "c" is correct. The auditor's overall responsibility is to obtain sufficient appropriate audit

evidence to provide reasonable assurance that fair value measurements and disclosures are in

conformity with GAAP.

Choice "a" is incorrect. While it is true that the auditor should determine whether management has

the intent and ability to carry out courses of action that may affect fair values, this is just one part of

evaluating fair value measurements and not the best description of the auditor's overall

responsibility.

Choice "b" is incorrect. While it is true that the auditor should assess the risk of material

misstatement of fair value measurements, this is done to determine the nature, timing, and extent

of audit procedures. It is not the best representation of the auditor's overall responsibility.

Choice "d" is incorrect. Management (and not the auditor) should make fair value measurements

and disclosures in accordance with GAAP and should identify and support any significant

assumptions used.