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Week 1 DQ2 - about a company’s financial position and if...

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Week 1, DQ 2 Why is public accounting often viewed as a guarantor of results or even as a provider of assurance that one’s investment is of high quality? There are several reasons why public accounting is often viewed as a guarantor of results or provider of assurance that one’s investment will be of high quality. For one, accounting standards, like GAAP and SOX are procedures that public accountants must follow. Secondly, public accounting is an analysis of a company’s financial position that is reviewed by a professional not directly associated with the company. Yet another reason, AICPA also has strict standards for public accountants. To what extent is it reasonable to view the auditor as a guarantor? Explain. It is quite reasonable to have a high view of an auditor as a guarantor. Auditors are bound by several regulating agencies to have high moral standards and are the ones that who view and give their opinion
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Unformatted text preview: about a company’s financial position and if the company adheres to accounting standards. Audits are performed by auditors who are 1) employed by a third party and 2) must conduct themselves in a professional and unbiased manner. To what extent do you believe that user expectations of public accounting profession appear to you to be unwarranted? Explain. There are many users (IE: management, creditors, and investors) who view a company’s financial data depending on their needs. Based on this, I do not believe that it is fair to assume that users’ expectations of the public accounting profession appear unwarranted. Different users have different needs, expectations, and interpret financial data according to their needs. This makes it unrealistic to expect that all users of a company’s financial data will be viewed in the same way, with the same expectations....
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