External auditors are typically:

• A. Employees of the company
• B. Regulators
• C. Independent, assess and evaluate the fairness of financial statements
• D. Board members

Answer: (C)

External auditors are independent professionals who examine a company’s financial statements to provide an independent opinion on whether they present a true and fair view in line with the applicable accounting framework. They aren’t employees of the company, nor regulators, nor board members. Independence is crucial because it gives stakeholders confidence that the assessment of the financial statements is objective and unbiased. Typically from external audit firms, they test evidence, evaluate accounting policies and disclosures, and then issue an auditor’s report. The main idea is to assess and evaluate the fairness and accuracy of the financial statements, offering assurance beyond what management provides.