What Is the Primary Purpose of Hiring a Public Accounting

question 36

Multiple Choice

What is the primary purpose of hiring a public accounting firm to examine the financial statements of the company?

• A) To detect all accounting errors made by the accounting system and employees.
• B) To provide credibility that the financial information conforms with international financial reporting standards in all material respects.
• C) To assure no fraud has been committed by the company's management.
• D) To detect fraud committed by employees.

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Definitions:

Fees Earned

Fees earned is an accounting term that refers to revenue generated from providing services to clients or customers during a specific time period.

Prepaid Insurance

The portion of insurance premiums that have been paid in advance for future coverage, and is considered an asset on the balance sheet.

Account Group

It refers to a collection of accounts that are related in some way, often used in accounting and finance to organize financial records.

Assets

Economic resources controlled by a business or individual that are expected to provide future benefits.