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

An auditor's primary duty is to verify the accuracy of financial statements and ensure that they present a true and fair view of the organization's financial condition. Duties include:
Measuring business events and communicating their impact (A).
Verifying the balance sheet and ensuring it represents a true and fair financial position (B).
Reporting whether the profit and loss account represents a true and fair view (D).
However, preparing final accounts or computing taxable income (C) falls under the role of an accountant, not an auditor.