Financial statements are audited primarily for what reason?

The primary purpose of auditing financial statements is to verify their accuracy and ensure fair representation of the financial position and performance of an organization. Auditors conduct thorough examinations of the financial records to provide reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error.

This verification process increases the credibility of the financial statements, helping users - such as investors, creditors, and regulatory agencies - to make informed decisions. Auditing ensures that the financial information conforms to generally accepted accounting principles (GAAP) or other relevant standards, which is crucial for transparency and accountability in financial reporting.

While improving financial literacy, ensuring compliance with organizational policies, and developing financial strategies are important aspects of financial management, they are not the central purpose of an audit. The key focus remains on accuracy and fair representation, fostering trust in the reported financial information.