Which of the following best describes the main reason that independent auditors report on management's financial statements?
A) Management fraud may exist, and it is likely to be detected by independent auditors.
B) The management that prepares the statements and the persons who use the statements may have conflicting interests.
C) Misstated account balances may be corrected as the result of the independent audit work.
D) The management that prepares the statements may have a poorly designed system of internal control.

Question

Quizplus · Accepted Answer

Independent auditors report on management's financial statements to provide assurance to the users of the statements that the information presented is reliable and accurate. The main reason for this is that there may be conflicting interests between the management that prepares the statements and the persons who use the statements, such as investors or creditors. The independent audit serves as a check on the reliability of the information presented, ensuring that misstatements are detected and corrected. Additionally, the audit may serve as a deterrent against fraudulent activity by management.

Which of the Following Best Describes the Main Reason That