The purpose of an audit is to
A) determine whether or not a company is a good investment.
B) render an opinion on the fairness of the statements.
C) determine whether or not a company complies with income tax regulations.
D) determine whether or not a company is a good credit risk.

Question

Quizplus · Accepted Answer

The purpose of an audit is to render an opinion on the fairness of the financial statements. This means that the auditor is evaluating whether the statements are accurate and complete, and whether they are presented in accordance with relevant accounting standards. Audits are typically required by law or by investors and lenders who rely on the financial statements to make decisions. While an audit may provide some information about a company's creditworthiness or compliance with tax regulations, these are not the primary objectives of the audit. Determining whether a company is a good investment involves additional analysis beyond the scope of an audit.

The Purpose of an Audit Is to