Choice "B" is correct. An auditor reporting on the audit of financial statements of an issuer should indicate in the auditor's responsibility paragraph that the engagement was conducted in accordance with PCAOB standards, and should refer to GAAP in the opinion paragraph.
Choice "a" is incorrect. An auditor reporting on the audit of financial statements of an issuer is required to refer to PCAOB standards in the auditor's responsibility paragraph. Auditors of nonissuers may include a reference to PCAOB standards.
Choice "c" is incorrect. An auditor reporting on the audit of financial statements of an issuer should indicate in the audit report that the engagement was conducted in accordance with PCAOB standards. This is an explicit statement in the report; it is not implied or assumed.
Choice "d" is incorrect. An auditor reporting on the audit of financial statements of an issuer should indicate in the auditor's responsibility paragraph that the engagement was conducted in accordance with PCAOB standards. Referring to generally accepted auditing standards instead is not an option, as audits of issuers must follow PCAOB standards.
