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What is the purpose of an audit?
What is the purpose of an audit?
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Practice Questions
1 question
Q1
What is the purpose of an audit?
To prepare financial statements
To detect fraud
To provide assurance on financial statements
To manage company finances
Show Solution
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The primary purpose of an audit is to provide assurance that the financial statements are free from material misstatement.
Questions & Step-by-step Solutions
1 item
Q
Q: What is the purpose of an audit?
Solution:
The primary purpose of an audit is to provide assurance that the financial statements are free from material misstatement.
Steps: 5
Show Steps
Step 1: Understand that an audit is a review of financial statements.
Step 2: Know that financial statements show how a company is doing financially.
Step 3: Realize that an audit checks if these statements are correct and honest.
Step 4: Learn that 'material misstatement' means big mistakes or lies in the financial statements.
Step 5: Remember that the main goal of an audit is to make sure there are no big mistakes or lies.
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