Question

Which of the following is incorrect statement for financial auditing?

• A. Financial Auditing is a systematic and dependent examination by qualified persons
• B. The primary purpose of financial auditing is to express an opinion as to truthfulness and fairness of financial statements
• C. The scope of financial auditing extends to all types of entities — commercial as well as non-commercial
• D. In financial auditing, the opinion of auditor is communicated through audit report to shareholders

Hint:

Logic Tip: Independence is the backbone of auditing profession.

Answer 1

The Correct Option is A

Step 1:
Financial auditing is an independent examination of financial statements.

Step 2:
Statement (1) says auditing is a dependent examination. This is incorrect because auditing must be: \[ \boxed{\text{Independent}} \]

Step 3:
Statements (2), (3), and (4) correctly describe financial auditing.

Step 4:
Therefore, the incorrect statement is: \[ \boxed{\text{(1)}} \]