ShatanaBentley-AC410-Auditing-Unit2-Homework

ShatanaBentley-AC410-Auditing-Unit2-Homework - AC 410 Unit...

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AC 410 Unit 2 Homework Your Name: Shatana Bentley (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 audit of a publicly held company is an extremely valuable tool for investors, creditors, and the broader community (or third parties) as a whole. In order to establish and maintain effective internal controls audits are performed and provide evidence of stability and assurance that none of the activities behind closed doors are fraudulent. 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) This allows the investing public to know the financial stability of a company they are possibly going to invest in. It allows the investing public to know if the company they wish to invest in is involved with anything that is illegal. It allows the investing public to figure out if this is a company that will be around long enough in order for them to invest there money into (if it is actually worth doing). 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) The audit committee provides an avenue to report perceived wrongdoing to an appropriate, independent body within an organization.
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ShatanaBentley-AC410-Auditing-Unit2-Homework - AC 410 Unit...

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