An audit is useful to financial statement users because it
A)Guarantees that the financial statements are accurate and correct.
B)Guarantees that management has not been involved in misappropriation of assets.
C)Provides reasonable assurance that the financial statements do not have material misstatements.
D)Assures users that confidentiality is maintained.

Question

Quizplus · Accepted Answer

An audit provides reasonable assurance that the financial statements do not have material misstatements, which is helpful for financial statement users in making informed decisions. Option A is incorrect as an audit does not guarantee the complete accuracy and correctness of financial statements. Option B is incorrect as an audit cannot guarantee the absence of misappropriation of assets. Option D is also incorrect as confidentiality is not related to the audit process.

An Audit Is Useful to Financial Statement Users Because It