The Audit Should Enhance Credibility of Financial Information Elliott and Jacobson assert that the immediate objective of the audit is to improve the reliability of information. A key distinction between credibility and reliability is whether the focus is on the financial information or the user of that information. Financial information is made more reliable by preventing, or detecting and correcting, material misstatements or omissions in it. Financial information is made more credible by increasing users' confidence that the information is reliable. The auditor can add justified credibility to financial statements even when no material misstatements or omissions are detected by validating their absence.
Reliability is a characteristic of the financial information.
The audit of the financial information adds significant assurance that the information is reliable and thereby enhances its credibility. No matter which view is taken, the audit objective is to improve the quality of the information. The answer is found in the implication concerning the importance attached to the appearance of independence. If the objective of an audit is merely to improve reliability, then the perceptions of users about the independence of auditors can be regarded as irrelevant, or at least insignificant, within a conceptual framework and principles of independence. Viewing the auditor's role as adding credibility increases the legitimacy of treating the appearance of independence as a separate, self-sufficient cause for regulation.