An audit provides independent assurance about which aspect of financial reporting?

• A. To identify all fraud
• B. To design internal controls
• C. To provide independent assurance on the fairness and accuracy of financial statements
• D. To maximize shareholder value

Answer: (C)

An audit provides independent assurance that financial statements are presented fairly and accurately. The auditor’s job is to form an opinion on whether the financial statements, taken as a whole, conform to the applicable financial reporting framework and are free from material misstatement. This assurance is independent, reflecting objective judgment. It’s not a guarantee that all fraud will be identified, nor a design service for internal controls (that’s management’s role), and it isn’t about maximizing shareholder value. So the statement that best captures what an audit assures is that the financial statements are fairly and accurately presented.