Why don't auditors prepare financial statements, as well as audit them?
A) It would take away a job from the controller of the company.
B) It would not eliminate errors in the financial statements.
C) It would be a conflict of interest and violates ethical standards.
D) It would streamline the process and be effective.

Question

Quizplus · Accepted Answer

Auditors are expected to be independent and objective when auditing financial statements. If auditors also prepare the financial statements, it creates a conflict of interest and violates ethical standards. This could lead to potential biases or lack of objectivity when auditing the same financial statements they prepared. Therefore, it's important to keep the two functions separate to maintain the integrity of the audit.

Why Don't Auditors Prepare Financial Statements, as Well as Audit