Which of the following statements is true of external auditing?
A) Major focus areas are processes, including risks, controls, and effectiveness and efficiency of processes.
B) External auditors perform both assurance and consulting services for public companies.
C) Primary scope of services performed includes audits of financial statements.
D) The primary client for a public company is upper management.

Question

Quizplus · Accepted Answer

External auditing primarily involves audits of financial statements, which is required by law for public companies. While external auditors may also provide consulting services, their main focus is on financial statement audits. The primary client for a public company's external auditor is the company's shareholders, as the auditor's report is included in the company's annual report and is used by investors to assess the company's financial health. The effectiveness and efficiency of processes may be evaluated as part of the audit, but it is not the main focus area.

Which of the Following Statements Is True of External Auditing