By law, the financial records of publicly held companies are required to be

• A. Audited by a certified professional accounting firm.
• B. Audited only by the company's internal accounting team.
• C. Audited by a non-certified individual.
• D. Not audited.

Answer: (A)

Publicly traded companies must have an external, independent audit of their financial statements. This means a certified public accounting firm—an independent firm—reviews and verifies the company’s records to provide credible assurance to investors, lenders, and regulators that the financial statements fairly reflect the company’s financial position. Independence matters because internal staff cannot provide the same objective verification.

Audits by internal teams aren’t considered sufficient for public companies because they aren’t independent, and audits by non-certified individuals aren’t permitted under professional and regulatory standards. Not auditing at all would leave stakeholders without needed oversight. While an audit gives reasonable assurance rather than a guarantee of perfection, it remains the standard requirement for publicly held corporations.