What is the primary purpose of conducting an audit?

The primary purpose of conducting an audit is to provide an independent evaluation of financial statements. This independent review is essential for ensuring that the financial statements fairly represent the organization's financial position and comply with relevant accounting standards. Auditors assess the accuracy of financial records and the effectiveness of internal controls, enhancing the credibility of the reported information. This process helps stakeholders, such as investors, creditors, and regulatory bodies, make informed decisions based on reliable financial data.

While identifying and reducing costs, improving employee performance, and determining market value of assets are important aspects of business management, they do not capture the central objective of an audit. An audit focuses specifically on the reliability and fairness of financial reporting, which is critical for maintaining trust and transparency in financial markets and organizations.