A financial and compliance audit is normally performed by an independent accounting firm. Which statement is true?

A financial and compliance audit is normally performed by an independent accounting firm. Which statement is true?

• A. It measures program objectives
• B. It is performed by internal staff
• C. It is normally performed by an independent accounting firm
• D. It focuses on environmental compliance

Answer: (C)

In audits, independence is essential. A financial and compliance audit is normally performed by an independent accounting firm to provide objective, credible assurance on the organization’s financial statements and its adherence to applicable laws and regulations. This independence helps stakeholders trust the results and reduces the risk of bias. If internal staff conducted the audit, objectivity could be compromised because these staff are part of the organization and may have conflicts of interest or familiarity that erode perceived impartiality. Measuring program objectives is the domain of performance or program audits, not a standard financial and compliance audit. While environmental compliance can be part of what’s reviewed, the broader financial and regulatory focus is on overall financial statements and general compliance, not exclusively environmental issues.

In audits, independence is essential. A financial and compliance audit is normally performed by an independent accounting firm to provide objective, credible assurance on the organization’s financial statements and its adherence to applicable laws and regulations. This independence helps stakeholders trust the results and reduces the risk of bias.

If internal staff conducted the audit, objectivity could be compromised because these staff are part of the organization and may have conflicts of interest or familiarity that erode perceived impartiality. Measuring program objectives is the domain of performance or program audits, not a standard financial and compliance audit. While environmental compliance can be part of what’s reviewed, the broader financial and regulatory focus is on overall financial statements and general compliance, not exclusively environmental issues.