An audit of financial statements is conducted to determine whether the:
A) organisation is operating efficiently and effectively.
B) overall financial statements are stated in accordance with specified criteria.
C) auditee is following specific procedures or rules set down by a peer group authority.
D) none of the above

Question

Quizplus · Accepted Answer

An audit of financial statements is mainly conducted to determine whether the overall financial statements are stated in accordance with specified criteria, usually Generally Accepted Accounting Principles (GAAP). While an audit may identify areas where an organisation can improve efficiency and effectiveness, this is not its primary objective. An audit is also not focused on assessing whether the auditee is following specific procedures or rules set down by a peer group authority, although it may assess compliance with legal and regulatory requirements.

An Audit of Financial Statements Is Conducted to Determine Whether