Auditing is
A) the examination of financial statements by a CPA in order to express an opinion on their fairness.
B) a part of accounting that involves only recording of economic events.
C) an area of accounting that involves such activities as cost accounting budgeting and accounting information systems.
D) conducted by the Securities and Exchange Commission to ensure that registered financial statements are presented fairly.

Question

Quizplus · Accepted Answer

Auditing involves the examination of financial statements by a CPA (Certified Public Accountant) in order to express an opinion on their fairness. This is typically done to ensure that the financial statements are free from material misstatement and to provide assurance to investors and other users of the financial statements. Option B is incorrect as accounting involves not just recording events but also analyzing and interpreting financial information. Option C is also incorrect as cost accounting, budgeting, and accounting information systems are all separate areas of accounting that do not fall under auditing. Option D is incorrect as the Securities and Exchange Commission (SEC) conducts financial reporting enforcement and not auditing.

Auditing Is