Questions: Which of the following best describes the primary role of auditors in financial reporting? Multiple Choice Independent party hired by a company to express a professional opinion of the extent to which the company's financial reporting is in compliance with generally accepted accounting principles Key employees of the company who actively participate on the management team in strategic planning, product development, and financial reporting Government employees assigned by local officials to ensure accurate financial reporting and operational integrity by the company Consultants that are hired by company management to advise on key matters related to competition, product pricing, employee retention, and financial reporting strategies

The answer is the first one: Independent party hired by a company to express a professional opinion of the extent to which the company's financial reporting is in compliance with generally accepted accounting principles.

Explanation for each option:

1. Independent party hired by a company to express a professional opinion of the extent to which the company's financial reporting is in compliance with generally accepted accounting principles: This is the correct description of the primary role of auditors. Auditors are independent professionals who review a company's financial statements to ensure they are accurate and comply with generally accepted accounting principles (GAAP). Their role is crucial in providing assurance to stakeholders about the reliability of financial information.

2. Key employees of the company who actively participate on the management team in strategic planning, product development, and financial reporting: This is incorrect. Auditors are not employees of the company they audit, nor do they participate in management activities. Their independence from the company is essential to provide an unbiased opinion.

3. Government employees assigned by local officials to ensure accurate financial reporting and operational integrity by the company: This is incorrect. Auditors are typically not government employees. While regulatory bodies may conduct audits, the primary role of financial auditors is performed by independent accounting firms, not government officials.

4. Consultants that are hired by company management to advise on key matters related to competition, product pricing, employee retention, and financial reporting strategies: This is incorrect. While consultants may provide advice on various business strategies, auditors specifically focus on assessing the accuracy and compliance of financial statements, not on advising on business strategies.