The need for independent audits of financial statements can be attributed to all of the following conditions except:
A) remoteness.
B) complexity.
C) consequence.
D) validity.
E) conflict of interest.

Question

Quizplus · Accepted Answer

Validity is not a condition that leads to the need for independent audits of financial statements. Independent audits are primarily required due to remoteness (distance between information providers and users), complexity (difficulty in understanding financial information), consequence (importance of financial information in decision-making), and conflict of interest (differences in objectives between information providers and users). Validity, on the other hand, refers to the accuracy and truthfulness of the information, which is what the audit seeks to ascertain, rather than a condition that necessitates an audit.

The Need for Independent Audits of Financial Statements Can Be