+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
Control systems in nonprofit organizations will never be as highly developed as in profit-seeking organizations." Do you agree? Explain.
What are the main concerns when analyzing a company's accounts receivable? What information other than the usually available financial statements, should you collect as part
Which one of the following is the service in which the CPA firm issues a written communication that expresses a conclusion about the reliability of a written assertion that
While the net worth method focuses on the balance sheet and the increase in net worth for the year the bank deposit method looks at the money deposited and withdrawn through
You are considering an investment in Bank of America (BAC, NYSE). From your analysis, you believe this stock should be valued so as to produce a 9.5 percent long-term rate o
Audit partner is concerned about his lack of knowledge of the industry the company is operating in, state of the company's industry and associated risk factors
What was the value of stock when it was purchased and when it was sold and given the uncertainty surrounding the collectability of the note, did an exchange occur? How do we a
It is critical for the investigator to understand the possible security risks that computer and network users face before conducting computer forensic investigations.