The external auditor is required to issue two separate reports

Question

The external auditor is required to issue two separate reports - one on the fairness of the internal controls and a second on the fairness of the financial statements.

Quizplus · Accepted Answer

The external auditor is primarily required to issue a report on the fairness of the financial statements. While they may review internal controls as part of their audit process, especially in the context of the Sarbanes-Oxley Act for publicly traded companies in the United States, the primary report is on the financial statements. A separate report on internal controls over financial reporting is required for public companies, but this is not universally applicable to all audits.