SherryCribb_Unit 2 Homework

SherryCribb_Unit 2 Homework - AC 410 Unit 2 Homework Your...

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AC 410 Unit 2 Homework Your Name: Sherry Cribb (Use this template to answer your Unit 2 homework assignment. This template is provided to help guide you through the answer process and is organized in the way that I will grade your assignment. Your text box will expand as you type in your answers. You will notice that in some cases I have designated a word minimum. This is to encourage you to thoroughly explore and provide a complete answer. There are other responses where you need to provide a certain minimum facts for a complete answer <such as: at least 5 relevant items> you need to provide at least 5 relevant items for full credit. ) 1-38 a) Explain the rational and value of an audit of a publically traded company to investors , creditors, and to the broader community as a whole . (You need to provide the MAIN reason why the audit is of value to third parties; and why it is of value) (40 word minimum) The main reason the audit is of value to third parties it determines if the financial statements are fair in accordance with GAAP. It's of value because the auditor provides expert of fairness in the finacial statements. The audit is separate from tht of management and third parties. Knowledge about company risks and financial reporting standards is vital. b) Explain why an audit of internal controls provides value to the investing public. (You need to provide three reasons) (Make sure you describe why an internal control audit provides value, not a financial statement audit as answered in Part A) (10 word minimum per reason) High level of technical competence which is having knowledge of computer systems so that effective controls are carried out . Freedom from bias in assessing the fairness fo financail presentations that the reporting doesn't favor one user over the other. c) Explain the importance of an audit committee to the reliability of the financial statements and the audit function. (You need to provide three reasons) (Make sure you describe why the audit committee is so important, not why audits themselves are important.) (10 word minimum per reason) To report perceived wrongdoings to an appropriate, independent body within the organization. To review substantive allegations made by emplyees or utside stakeholders.
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SherryCribb_Unit 2 Homework - AC 410 Unit 2 Homework Your...

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