Which of the following is NOT a primary role of an independent auditor?

• A. Evaluating the effectiveness of internal controls
• B. Providing reasonable assurance that financial statements are free from material misstatement
• C. Detecting and preventing all instances of fraud within a company
• D. Expressing an opinion on the fairness of financial statements

Answer: (C)

Verified step by step guidance

1. Understand the role of an independent auditor: An independent auditor is responsible for evaluating financial statements to ensure they are prepared in accordance with applicable accounting standards and provide reasonable assurance that they are free from material misstatement.
2. Clarify the concept of internal controls: Independent auditors assess the effectiveness of a company's internal controls as part of their audit process. This helps ensure that financial reporting is reliable and accurate.
3. Explain the concept of reasonable assurance: Auditors provide reasonable assurance, not absolute assurance, that financial statements are free from material misstatement. This means they use professional judgment and audit procedures to identify significant errors or fraud, but they cannot guarantee perfection.
4. Highlight the limitations of an auditor's role: Detecting and preventing all instances of fraud is not a primary role of an independent auditor. While auditors may identify fraud during their work, their focus is on material misstatements and the fairness of financial statements, not exhaustive fraud detection.
5. Summarize the primary role of an auditor: The auditor's main responsibility is to express an opinion on the fairness of financial statements, ensuring they accurately reflect the company's financial position and performance in accordance with accounting standards.