Question

Which of the following best describes the primary role of auditors in financial reporting? A. Consultants that are hired by company management to advise on key matters related to competition, product pricing, employee retention, and financial reporting strategies. B. Key employees of the company that actively participate on the management team in strategic planning, product development, and financial reporting. C. Government employees assigned by local officials to ensure accurate financial reporting and operational integrity by the company. D. Independent party hired by management to express a professional opinion of the extent to which the company's financial reporting is in compliance with generally accepted accounting principles

Answer 1

Answer:

D. Independent party hired by management to express a professional opinion of the extent to which the company’s financial reporting is in compliance with generally accepted accounting principles.

Explanation:

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Answer 2

'Auditors' are the 'individuals who conduct an independent review and examination of system records and activities in order to test the adequacy of the effectiveness of data security and processes.'

The statement that most adequately displays the central role of auditors in the 'financial reporting' would be:

D). "Independent party hired by management to express a professional opinion of the extent to which the company's financial reporting is in compliance with generally accepted accounting principles."

The responsibilities of an auditor include:

• Review and monitoring of the financial records to prevent any discrepancy.
• Ensure that the organization follows all the standard principles and policies.
• Prevent it from any kind of fraud or risk.
• Assist in saving costs.
• Ensure the operations are being run effectively.
• Preparation of reports and data charts etc.

Thus, option D correctly goes with the above-stated duties that he/she is an individual who looks after that the company is in proper alliance with the set principles.

Learn more about 'Financial Reporting' here:

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