Some uses and limitations of financial statement analysis are verifiability, measurability, fraud and error, use of historical cost basis, different accounting policies, and professional judgment. Under verifiability, audit is the important instrument that allows people to put their trust into financial statements, but the audit can only go so far to show reasonable and not guaranteed support on the complete total

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AUDIT An audit is an independent examination of financial information of any entity whether profitoriented or not irrespective of its size or legal form when such an examination is conducted with a vi... View the full answer