Which of the following best describes why an independent auditor is asked to express an opinion on the fair presentation of financial statements?
A)It is difficult to prepare financial statements that fairly present a company's financial position and changes in cash flows without the expertise of an independent auditor.
B)It is management's responsibility to seek available independent aid in the appraisal of the financial information shown in its financial statements.
C)The opinion of an independent party is needed because a company is not likely to be considered objective with respect to its own financial statements.
D)It is a customary courtesy that all stockholders of a company receive an independent report on management's stewardship in managing the affairs of the business.

Question

Quizplus · Accepted Answer

The opinion of an independent party, such as an independent auditor, is needed because a company may not be considered objective with respect to its own financial statements. This lack of objectivity could lead to biased or inaccurate financial statements, which could mislead investors and others who rely on the financial information. Therefore, an independent auditor is asked to express an opinion on the fair presentation of financial statements to provide an objective evaluation of the financial information presented in the statements.

Which of the Following Best Describes Why an Independent Auditor