Which of the following best describes the purpose of an audit?

A) To prove the accuracy of an entity's financial statements.
B) To lend credibility to an entity's financial statements.
C) To audit every transaction that an entity entered into.
D) To establish that a corporation's stock is a sound investment.

The purpose of an audit is to lend credibility to an entity's financial statements by examining and evaluating the accounting records and practices. While audits do test the accuracy of financial statements, this is not the sole purpose of an audit. Audits also do not necessarily examine every transaction that an entity enters into or establish the value of a corporation's stock.