Auditors often earn considerable fees from a company for examining (auditing) its financial statements. In addition, it’s not uncommon for auditors to earn additional fees from the company by providing consulting, tax, and other advisory services.Required:1. Which party has primary responsibility—auditors or company executives—for properly applying accounting standards when communicating with investors and creditors through financial statements?2. Are auditors considered employees of the company?
Auditors often earn considerable fees from a company for examining (auditing) its financial statements. In addition, it’s not uncommon for auditors to earn additional fees from the company by providing consulting, tax, and other advisory services.Required:1. Which party has primary responsibility—auditors or company executives—for properly applying accounting standards when communicating with investors and creditors through financial statements?2. Are auditors considered employees of the company?
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter1: Auditing: Integral To The Economy
Section: Chapter Questions
Problem 18MCQ
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Auditors often earn considerable fees from a company for examining (auditing) its financial statements. In addition, it’s not uncommon for auditors to earn additional fees from the company by providing consulting, tax, and other advisory services.
Required:
1. Which party has primary responsibility—auditors or company executives—for properly applying accounting standards when communicating with investors and creditors through financial statements?
2. Are auditors considered employees of the company?
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