ACCT444_WK1_HW1_DB - Week 1 Homework Question 1-18 a The...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Week 1 Homework Question 1-18 a) The ways that services provided by Consumer Unions are similar to the assurance services provided by CPA firms are that they both aim toward ensuring quality of service, customer satisfaction, and they both provide remedies for customer or client complaints. The consumer union and a professional CPA both conduct independent evaluations of each commodity. They are both independent bodies that are not associated with any of the companies whose products they evaluate. They are also similar because they can both express their unbiased independent opinions to customers and on financial statements. b) Information risk occurs when information ends up being inaccurate, incorrect or incomplete causing a misleading basis for decision making. Areas of information risk for automobile consumers include a lack of information given by vendors during the purchase process, an unawareness of services the vendor offers after the sale of the automobile, and they may pay higher prices or purchase a lower quality product due to informational deceit. c) Four causes of informational risk for users of financial statements are nearly identical to an automobile consumer. These causes include the following: 1. Remoteness of Information: Due to growth in size and ranges of businesses from globalization and diversification, it is too difficult to obtain the first-hand sensitive information, and information is made to travel through various channels of communication, distorting the information. 2. Biases and Motives of the Provider: If a provider presents only information that benefits them it affects the accuracy level of information, increasing the information risk. 3. Voluminous Data: An abundance data regarding business transactions of different natures and sizes are the leading reason that adds to the trouble and enhances the information risk.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern