A correct relationship among the auditor, the client, and the external users is
A) management of a public company hires the independent auditor.
B) the audit committee of a private company hires the independent auditor.
C) the client provides capital to the external users.
D) the external users can rely upon the auditor's report to reduce information risk.

Question

Quizplus · Accepted Answer

The correct relationship among the auditor, the client, and the external users is that the external users (such as investors, creditors, and shareholders) rely upon the auditor's report to reduce the information risk associated with the financial statements. The client hires the independent auditor to perform the audit and provide an opinion on the fairness of the financial statements, but the primary responsibility of the auditor is to provide an independent and objective assessment of the financial statements for the benefit of the external users. Therefore, choice D is the correct answer.

A Correct Relationship Among the Auditor, the Client, and the External