Final answer:
External auditing involves the examination of financial statements and other records to determine if they are presented fairly and in accordance with accounting principles.
Step-by-step explanation:
Independent CPAs perform audits on the financial statements of issuers.
This type of auditing is known as external auditing.
External auditing involves the examination of financial statements and other records to determine if they are presented fairly and in accordance with accounting principles. This is done by an independent certified public accountant (CPA) who is not employed by the company being audited.
Examples of external auditing include the annual audits conducted by CPAs on the financial statements of publicly traded companies to ensure accuracy and transparency for investors.