Question

Which of the following are the duties of an auditor?
(A) To measure business events in terms of profit and loss and communicate the financial conditions of the business
(B) To prepare a balance sheet representing a true and fair picture of the financial position of the business
(C) To prepare final accounts, computation of taxable income, etc., while acting as an accountant
(D) To report whether the profit and loss account represents a true and fair picture of the profit or loss

• A. (A), (B), and (D) only
• B. (B), (C), and (D) only
• C. (A), (B), (C), and (D)
• D. (A), (C), and (D) only

Hint:

Auditors focus on verification and reporting, while accountants handle preparation and computation.

Answer 1

The Correct Option is A

Auditors are primarily responsible for verifying the accuracy of financial statements to ensure they reflect the organization's true and fair financial condition. Key duties encompass:
Assessing and reporting the impact of business events (A).
Confirming the balance sheet accurately portrays the financial position (B).
Stating if the profit and loss account presents a true and fair view (D).
Conversely, preparing final accounts or calculating taxable income (C) is the responsibility of an accountant, not an auditor.