Which of the following best describes the reason why an independent auditor reports on financial statements?
A)A management fraud may exist and it is more likely to be detected by independent auditors.
B)Different interests may exist between the company preparing the statements and the parties using the statements.
C)A misstatement of account balances may exist and is generally corrected as the result of the independent auditor's work.
D)A poorly designed internal control system may be in place.

Question

Quizplus · Accepted Answer

An independent auditor reports on financial statements to provide assurance to the stakeholders using the statements that the statements are free of material misstatement and fairly present the financial position, results of operations, and cash flows of the entity. The need for this assurance arises because different interests (e.g. management, investors, creditors) may exist between the company preparing the statements and the parties using the statements. An independent auditor's work provides an objective opinion about the accuracy and completeness of the financial statements.

Which of the Following Best Describes the Reason Why an Independent