Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

What is the main purpose of an auditor's report?

1. To provide a summary of management’s financial performance.

2. To express an opinion on the fairness of the financial statements.

3. To disclose management's future financial plans.

4. To present detailed financial ratios of the entity.

The correct answer is: To express an opinion on the fairness of the financial statements.

The main purpose of an auditor's report is to express an opinion on the fairness of the financial statements. This opinion is critical because it provides stakeholders, such as investors, creditors, and regulators, with an independent assessment of the financial statements' accuracy and reliability. The auditor evaluates whether the financial statements are presented fairly in accordance with the applicable financial reporting framework, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). This independent perspective enhances the credibility of the financial statements and helps users make informed decisions. The other options address different aspects of financial reporting but do not encapsulate the primary role of an auditor's report. While summarizing management’s financial performance, disclosing future financial plans, or presenting financial ratios may be valuable information, these elements are typically the responsibility of management and are not the primary focus of the auditor's assessment. The auditor's role is to evaluate the financial statements for fairness and compliance rather than to summarize or predict outcomes.