+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
Carol Stokke receives her April 6 bank statement showing a balance of $859.75; her checkbook balance is $954.25. The bank statement shows an ATM charge of $25.00, NSF fee of
Control risk has been assessed as high and detection risk is low. What is the timing of the substantive procedures likely to be and the auditor has decided that they will use
ACT303 Principles of Auditing. Discuss the meaning of earnings management and how it affects the final stages of a financial report audit. Identify means whereby the auditor m
What are the circumstances that could prevent the external auditors from providing an unqualified report? What steps can be taken by CSSC to address any concerns?
Thinking about some of the scandals in the news over the last few years such as Enron, WorldCom, Adelphia, Bernie Madoff, etc., analyze and discuss the conditions that could
Suppose you were considering depositing your savings in one of three banks, all of which pay 5 percent interest; bank A compounds annually, bank B compounds semiannually, an
A revised or final acceptable level of detection risk is determined for each assertion after (1) assessing inherent risk, (2) performing analytical procedures in audit plann
There are several different professional codes of conduct. How does an accountant or auditor determine which code of conduct to follow? Provide examples.