Auditors issue an ________ to indicate whether financial statements have been prepared in accordance with accepted accounting rules.

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Question: Auditors issue an ________ to indicate whether financial statements have been prepared in accordance with accepted accounting rules.
Answer options: 1) auditor’s report  2) auditor’s financial statement  3) annual report  4) auditor’s opinion
Option 1: auditor’s report. While an auditor’s report is the formal document that communicates the auditor’s findings, including an opinion, its primary role is to present the auditor’s conclusions and the basis for those conclusions. It is not in itself the conclusion about compliance; rather, it contains that conclusion. Therefore, this choice is not the best fit for the blank when the prompt emphasizes indicating conformity with accepted accounting rules.
Option 2: auditor’s financial statement. This term is inappropriate because auditors do not issue their own financial statements; they audit the company’s financial statements and prepare a report about them. Using this option would confuse the issuer (the company) with the auditor’s role. Hence, this is incorrect.
Option 3: annual report. An annual report is prepared by the company and presents financial results to users; it is not something auditors issue to indicate conformance. Therefore, this choice misattributes the document’s origin and purpose, making it incorrect.
Option 4: auditor’s opinion. The word opinion captures the evaluative conclusion about whether the financial statements are prepared in accordance with applicable accounting rules. In auditing practice, the opinion is the core element that states whether statements are fairly presented in all material respects. This aligns precisely with the purpose stated in the question, making it the most appropriate choice.
In summary, the reasoning hinges on distinguishing the formal document (report) from the specific evaluative conclusion (opinion) that communicates conformity with accounting rules. The evaluative nature described in the prompt points to the term that represents the auditor’s judgment about compliance, which is the auditor’s opinion.

2025SU BSN 100 01 Quiz: Chapter14

Auditors issue an ________ to indicate whether financial statements have been prepared in accordance with accepted accounting rules.

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