There are four conditions that give rise to the need for independent audits of financial statements. One of these conditions is consequence. In this context, consequence means that the:
A) users of the statements may not fully understand the consequences of their actions.
B) auditor must anticipate all possible consequences of the report issued.
C) impact of using different accounting methods may not be fully understood by the users of the statements.
D) financial statements are used for important decisions.
E) financial statements were prepared in accordance with GAAS.

Question

Quizplus · Accepted Answer

Consequence, in the context of the need for independent audits, refers to the significance of the financial statements in making important decisions. This underscores the importance of having accurate and reliable financial statements, as they influence critical business and investment decisions.

There Are Four Conditions That Give Rise to the Need