With regard to audit of financial statements, which one of the following statements is incorrect?
1
Audited financial statements are useful for settling claims for higher wages or bonuses as well as for property damage caused by fire or any other calamity.
2
Audited financial statements help in settlement of liability for taxes.
3
It does not act as a moral check on employees for fraud or embezzlement.
4
It protects the financial interests of those persons who are not associated with the management of the entity, be they partners, shareholders, bankers, financial institutions, public at large, etc.