Unformatted text preview: provided capital for expansion. Conway Computer’s revenues and proﬁts increased by
25 percent in each of the last two years, and the Steinbuker brothers and the venture capital ﬁrm decided
to take the company public through a stock sale. However, they knew that the company’s ﬁnancial statements needed to be audited by a reputable public accounting ﬁrm before a registration statement could
be ﬁled with the Securities and Exchange Commission and in order for investors to trust the stock offering.
The company hired a major public accounting ﬁrm to perform its audits and the company successfully sold
stock to the public. These situations show the importance of auditing to both private and public enterprise. By adding an audit to each situation, the users of the nancial statements have
additional assurance that the nancial statements report honestly and accurately, and
they will be more willing to rely on those statements. Auditors can also provide valuable
assurance for operating information, information systems reliability and security...
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This note was uploaded on 12/08/2012 for the course ACCT 564 at Washington University in St. Louis.