Final answer:
External auditors, who should adhere to GAAP or IFRS, may face client pressure to manipulate financial statements but must remain objective and follow auditing standards to ensure the accuracy and reliability of financial reporting.
Step-by-step explanation:
External auditors
External auditors are professionals who conduct an independent examination of a company's financial statements to ensure that they provide a true and fair view of the financial performance and position of the company. These statements are typically prepared in accordance with a set of accounting standards known as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), depending on the jurisdiction. Auditors must maintain integrity and independence in their work; however, they can sometimes face pressure from clients to manipulate financial statements.
Even though auditors might face such pressures, it is imperative that they uphold the principles of objectivity and professionalism. The Auditor's Responsibility is to express an opinion on the financial statements based on their audit, which should be conducted in compliance with auditing standards. These standards are there to protect stakeholders, including investors and the general public, who rely on accurate financial information to make decisions.
External auditors may be pressured by clients to manipulate the financial statements regardless of whether they conform with Generally Accepted Accounting Principles (GAAP).
GAAP refers to the set of accounting standards and principles that govern financial reporting.
Manipulating financial statements goes against the principles of transparency and accountability in financial reporting.