The Basic Purpose of Audited Financial Statements Is To

question 55

Multiple Choice

The basic purpose of audited financial statements is to:

• A)Provide the reporting company with assurance that all assets are protected from theft or embezzlement.
• B)Prepare financial statements for companies that do not have their own accounting departments.
• C)Provide users of the financial statements with assurance that the statements are verifiable and are presented in conformity with generally accepted accounting principles.
• D)Provide both the reporting company and the users of the statements with a written guarantee that the statements are error-free.

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Definitions:

Bank's Warranties

Assurances provided by a bank concerning the validity and authenticity of a financial instrument or transaction.

Forged

The process of illegally copying or altering documents or objects, often to deceive or commit fraud.

Bank Statement

A summary issued by a bank detailing the transactions in a customer's account over a specific period, including deposits, withdrawals, and balances.

Stop Payment

An order issued to a bank by an account holder not to pay a specific check that has been written and issued but not yet cashed.