What is the primary purpose of a financial statement audit?

The primary purpose of a financial statement audit is to provide an independent assessment of financial statements. This independent evaluation is crucial because it enhances the credibility and reliability of the financial information presented by an organization. Auditors, typically external to the entity being audited, apply established auditing standards to examine the financial statements and ensure that they fairly represent the company's financial position and performance in accordance with the applicable financial reporting framework (such as GAAP or IFRS).

This independent assessment is vital for various stakeholders, including investors, creditors, and regulatory bodies, as it assures them that the financial statements are free from material misstatements and accurately depict the company’s economic transactions and condition. As a result, stakeholders can make more informed decisions based on a solid and trustworthy representation of the company's financial health.