Question

question 5 of 25
policies
current attempt in progress
auditing is
a part of accounting that involves only recording of economic events.
conducted by the securities and exchange commission to ensure that registered financial statements are presented fairly.
the examination of financial statements by a cpa in order to express an opinion on their fairness.
an area of accounting that involves such activities as cost accounting, budgeting, and accounting information systems.

Explanation:

• Option 1: Recording economic events is bookkeeping, not auditing. Eliminate.
• Option 2: SEC oversees but doesn't conduct audits; auditors (like CPAs) do. Eliminate.
• Option 3: Auditing involves a CPA examining financial statements to opine on fairness. Correct.
• Option 4: Cost accounting, budgeting, etc., are management accounting, not auditing. Eliminate.

Answer:

C. the examination of financial statements by a CPA in order to express an opinion on their fairness.