What is the purpose of using a hash algorithm on financial statements?

• A. To encrypt the data.
• B. To ensure the integrity of the data after approval.
• C. To compress the data for storage.
• D. To verify the data's authenticity with a digital signature.

Answer: (B)

Hashing a financial statement creates a fixed-size fingerprint that uniquely represents the content. The main idea is to be able to verify integrity: if the document is altered after approval, recomputing the hash will yield a different value, signaling tampering. Hashes do not provide confidentiality (that’s encryption) and they are not used to compress data for storage. While digital signatures use hashes as part of their process to prove authenticity and non-repudiation, the hash itself is primarily about detecting any changes. So the best fit is that the hash ensures the integrity of the data after approval.