Explain into detail some of the difficulties associated with the financial system.

Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter3: Internal Control Over Financial Reporting: Responsibilities Of Management And The External Auditor
Section: Chapter Questions
Problem 27RQSC
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Explain into detail some of the difficulties associated with the financial system.

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Step 1

Financial system is the system developed or created by various financial institutions such as banks, large corporate houses, etc. that helps in exchange of funds.

 

Step 2

Financial system performs various functions such as:

  • Exchange of funds
  • Liquidity to financial assets
  • Helps in price determination of assets
  • Easy conversion of assets into cash
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