The purpose of an audit is to
A)determine whether or not a company is a good investment.
B)comply with income tax regulations.
C)determine whether or not a company is a good credit risk.
D)ascertain that the financial statements follow GAAP.

Question

Quizplus · Accepted Answer

The purpose of an audit is to confirm that financial statements are accurate and follow Generally Accepted Accounting Principles (GAAP). This helps ensure that stakeholders can rely on the information provided in the financial statements to make informed decisions. While an audit may provide information relevant to investment or credit decisions, these are not the primary purposes of an audit. Compliance with income tax regulations may also be a relevant consideration, but it is not the primary purpose of an audit.

The Purpose of an Audit Is to