Financial statements are audited by outside accountants
A)because it is a requirement stated in the Internal Revenue Code.
B)only when fraudulent financial reporting is suspected.
C)who then report on whether or not the company is a good investment.
D)to increase the users' confidence in the statements' reliability.

Question

Quizplus · Accepted Answer

Financial statements are audited by outside accountants to increase the users' confidence in the statements' reliability. Auditors provide an independent opinion on whether the financial statements are free from material misstatements and are presented fairly in accordance with the applicable financial reporting framework. This helps users, such as investors and lenders, make informed decisions based on reliable financial information. It is not a requirement stated in the Internal Revenue Code, and while auditors may report on potential fraud, their primary role is to provide assurance on the accuracy and completeness of financial statements rather than to evaluate whether the company is a good investment.

Financial Statements Are Audited by Outside Accountants