+1-415-670-9189
info@expertsmind.com
Benefits and limitations of audit
Course:- Auditing
Reference No.:- EM1354503


Assignment Help
Assignment Help >> Auditing

A fellow business student questions the benefits of an audit as follows:

"Why should a company hire auditors? As far as I can tell auditors of public companies charge millions of dollars in audit fees, and it is not clear to me that management receives any benefit for this expenditure. It is just money down the drain. It is also not clear to me that auditors accomplish anything. We have seen a number of material restatements of financial statements. Why should a company pay for audits that are ineffective? I think auditors are just a drain on society."

a. Explain the economic benefits provided by a financial statement audit.

b. Explain the inherent limitations that might prevent auditors from finding every potential material misstatement in financial statements.


Ask Question & Get Answers from Experts
Browse some more (Auditing) Materials
Prepare adjusting entries at December 31. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatic
Determine the information contained in internal audit report
Would your answer change if EFL had written to King and Queen advising you that they intended to make a loan to Impulse and were relyingon the 2012 audited financial report
Determine if a qualified opinion, adverse opinion, or a disclaimer of opinion would be issued for each of the above occurrences. Identify the contents of each part.
What is the tax treatment of travel expenses for the purpose of data collection paid by a tenured full professor? Not sure what IRC this will relate to and need assistance get
the bankruptcy proceedings are closed, and creditors receive 10 percent of the amount due on the debt. What is Becky's bad debt deduction for 2012? For 2013?
Explain how bond discounts and premiums usually arise. Describe how they are accounted for in the balance sheet and income statement.
Furniture is dropped, salaries and other direct fixed costs can be avoided. In addition, sales of computer equipment can increase by 13%. Allocated fixed costs are assigned