+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.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Auditing) Materials
Write a summary of the article and give complete citation. Make sure to include the purpose and intent of the article. Explain who you believe was the intended audience for th
What summary journal entry did Disney make to record interest incurred during fiscal 2009? (Hint: Don't forget to distinguish between interest incurred and cash paid for int
What are possible ways for an account to be misstated? Provide two examples of common types of misstatements that may occur in specific accounts - What issues woul
Discuss the considerations for implementing an operating and database system. Recommend the optimum system, considering the types of revenue and expense transactions for thi
What are the responsibilities of the independent auditor for the detection of fraud involving misappropriation of assets and fraudulent financial reporting Discuss fully, in
Define fraud and the roles and responsibilities of an Auditor in detecting and reporting fraud. Talk about the impact of accounting fraud. Give an example of fraudulent acti
Your name is Thom Croft and you are a recently-promoted audit manager in Cup & Co, a firm of Chartered Certified Accountants. Richard Hill is a senior partner in the firm. You
Classify the evidence by source into one of four categories: (1) directly from outsiders, (2) indirectly from outsiders, (3) internal but validated externally, and (4) entir