The work of the external independent auditor includes a letter that states that

Question

The work of the external independent auditor includes a letter that states that the financial information represents fairly the financial position of the company and that these statements were:

based on the company's accounting information system (AIS)

constructed in conformity with generally accepted accounting principles

an accurate picture of the company's market position

developed using management's choice of accounting enhancement techniques

based on the company's accounting information system (AIS)

constructed in conformity with generally accepted accounting principles

an accurate picture of the company's market position

developed using management's choice of accounting enhancement techniques

Explanation / Answer

Answer: b constructed in conformity with generally accepted accounting principles because of ethical understanding and reasoning and The goal is to determine whether these statements have been prepared in conformity with generally accepted accounting principles (GAAP). Financial statement audits are normally performed by firms of certified public accountants; users of auditors' reports include trade creditors, management, investors, bankers, financial analysts and government agencies.

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