Independent auditors express an opinion on the:

• A. fairness of the financial statements in accordance with generally accepted accounting principles (GAAP)
• B. future profitability of the company
• C. company's internal management decisions
• D. effectiveness of marketing strategies

Answer: (A)

Verified step by step guidance

1. Understand the role of independent auditors: Independent auditors are professionals who review a company's financial statements to ensure they are accurate and comply with accounting standards.
2. Clarify the scope of an auditor's opinion: Auditors express an opinion on the fairness of the financial statements, ensuring they are prepared in accordance with generally accepted accounting principles (GAAP). They do not evaluate future profitability, management decisions, or marketing strategies.
3. Recognize the importance of GAAP: GAAP provides a standardized framework for financial reporting, ensuring consistency and comparability across companies. Auditors assess whether the financial statements adhere to these principles.
4. Differentiate between financial statement auditing and other evaluations: Auditors focus solely on the financial statements and their compliance with GAAP. They do not provide opinions on operational aspects like marketing strategies or management decisions.
5. Conclude the auditor's responsibility: The primary responsibility of independent auditors is to provide assurance to stakeholders that the financial statements are free from material misstatements and fairly represent the company's financial position.