Question

Bankers usually insist that prospective business borrowers submit audited financial statements along with a loan application. Why should financial statements be audited by a CPA?

Answer 1

Because audited financial statements are more reliable than unaudited financial statements.

Step-by-step explanation:

Answer 2

Financial statements should be audited by a CPA because it provides an independent and objective assessment of the accuracy and reliability of the financial statements. This ensures that the information presented in the financial statements is complete and free from material misstatements. An audited financial statement can provide greater confidence to the lender that the borrower is financially sound and able to repay the loan.