Why is the audit report important in the analysis of a company?
A)It guarantees the accuracy of the information in the financial statements.
B)It guarantees the accuracy of the internal controls of the company
C)The auditors are hired by management to assess the appropriateness of the accounting policies chosen.
D)The auditors are an independent third party expressing an opinion on the fairness of the financial statements.

Question

Quizplus · Accepted Answer

The audit report is important in the analysis of a company because auditors are independent third parties that express an opinion on the fairness of the financial statements. This gives assurance to investors and stakeholders that the financial statements are reliable and can be used to make informed decisions. While auditors may also assess the effectiveness of internal controls and the appropriateness of accounting policies, their primary role is to provide an independent evaluation of the financial statements.

Why Is the Audit Report Important in the Analysis of a Company