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The correct answer to the question is:
E. An audit
Here's why:
1. An audit is a systematic examination of a company's accounting system. During an audit, independent auditors review the company's financial records, transactions, and internal controls to assess the accuracy and reliability of its financial reports.
2. The main goal of an audit is to determine whether the financial reports of a company provide a true and fair view of its operations, financial position, and performance.
3. By conducting an audit, stakeholders such as investors, creditors, and regulators gain assurance that the company's financial statements are free from material misstatements and fraud.
Therefore, an audit plays a crucial role in ensuring the transparency and integrity of a company's financial reporting process.
