What is the main focus of an external financial audit?

The primary objective of an external financial audit is to provide reasonable assurance that the financial statements of an organization accurately reflect its financial position and comply with relevant accounting standards and legal requirements. This involves an independent auditor examining the financial records and practices of the entity to verify that the financial statements present a true and fair view of its financial situation. This assurance is critical for stakeholders, including regulators, investors, and the public, who rely on these statements for decision-making.

In contrast, while evaluating government spending may play a role in financial oversight, it is not the central focus of an external audit. Internal control systems are indeed examined during an audit, but the audit aims to evaluate the overall financial statements rather than just these systems. Additionally, assessing employee performance does not fall under the responsibilities of an external financial audit, as that is typically the domain of internal human resources or management practices.