AU-C Section 200.12-13: The Overall Objectives of the Auditor

AU-C Section 200.12-13 says:

".12 The overall objectives of the auditor, in conducting an audit of financial statements, are to

1.  obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with an applicable financial reporting framework; and
2.  report on the financial statements, and communicate as required by GAAS, in accordance with the auditor's findings. 

.13 In all cases when reasonable assurance cannot be obtained and a qualified opinion in the auditor's report is insufficient in the circumstances for purposes of reporting to the intended users of the financial statements, GAAS require that the auditor disclaim an opinion or withdraw from the engagement, when withdrawal is possible under applicable law or regulation."

Let's pick this apart phrase by phrase:

• "overall objectives":  This section describes the overarching goal of the auditor when performing the audit of financial statements under GAAS.
• "reasonable assurance": There is no way for the auditor to obtain absolute assurance that the financial statements are free from material misstatements, due to several inherent limitations in performing the audit (e.g., cost/benefit limitations, information limitations, or fraud).  In that case, the best the auditor can hope for is to obtain a high level of assurance that is reasonable in the circumstances.
• "as a whole": The auditor has to determine whether all the uncovered misstatements and those that might still be remaining are material to the financial statements overall.
• "material misstatement": The auditor is not expected to find every misstatement; only those that are material or would affect an economic decision to be made by the financial statement users.  A misstatement is any difference between an amount/disclosure/classification/etc that is different than what is prescribed by the applicable financial reporting framework (i.e., GAAP, cash basis, regulatory basis, etc.)
• "fraud or error": The auditor is not required to find fraud or errors; he is merely required to find misstatements, which might be caused by fraud or error.
• "opinion":  The auditor is required to determine "yes or no", are the financial statements free from material misstatement as a whole; nothing else.  For example, he is not required to correct misstatements or even to prepare the financial statements.
• "present fairly...financial reporting framework":  This means the accounts/disclosures/classifications/amounts/etc are recorded or presented in line with the financial reporting framework used.
•  "report and communicate...findings": In addition to the opinion report, the auditor is required to communicate findings to those charged with governance and to management in letters.  These letters might describe the conduct of the audit (i.e., any difficulties in achieving the audit objectives) and any internal control improvements that could be made at the entity to prevent misstatements in the future.

https://www.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/au-c-00200.pdf