Other users of financial reports also has an interest for assurance services

Other users of financial reports also has an interest

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Other users of financial reports also has an interest for assurance services. Examples: Investors, Suppliers, Customers, Lenders, Employees, Governments, General public. 保险服务的 需求 主要 来自 股东和 业主。 他财务报告的使用者 对保证服务 感兴趣 例子 : 资者 供应商 客户 、贷款 、雇 政府、 Why users demand assurance services? 用户 要保证服务 ? Remoteness of information: Users do not have access to internal information of the company, hence they depend on auditor's certification. Complexity: Users’ lack of understandability of financial reports can be compromised with the audit report. Competing incentives: Users may find it difficulty to identify if management presents bias information. Reliability: Independent and competent third party’s assurance provides the reliability of information in financial reports. 信息的 远程 : 用户 无法访 问公司的 内部 信息, 因此 他们 依赖 于审计师的 证。 复杂 : 用户对财务报告的理 缺乏 可能会 影响 审计报告。 竞争 激励 : 用户可能会发 难识 别管理层是否提供了 见信息。 : 独立、称职 第三 方保证提供财务报告信息的可 性。 Theoretical frameworks for the Demand for Auditing 审计 需求 的理论框架 The demand for audit has been explained with following 3 theories: 1) Agency Theory : Auditor intervenes as an independent third party to resolve the agency conflict between owners and managers of the company. 2) Information Hypothesis : Audit reports enhance the reliability of information in financial reports. 3) Insurance Hypothesis : Investors prefer to invest in companies those issue audited financial statements, hoping to spread the risk of business failures. Auditors are required to take professional indemnity insurance. 审计 需求 可以用以下 个理论 来解释 : 代理理论 : 审计师作为 独立 第三 介入解决 公司所有者 管理者之 的代理 冲突 信息 假设 : 审计报告 增强 了财务报告中信息的可 性。 保险 假说 : 资者 向于 些发 审计财务报表的公司, 望分 散企 破产 险。审 计员 必须投 弥偿 保险。
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Insurance hypothesis tells us that: a. investors can insure themselves against loss by investing in a diverse investment portfolio should an individual investment fail. b. investors will demand that financial reports be audited as a way of insuring against some of their loss should their investment fail. c. the entity can take out insurance to protect itself from such risks as employee or management fraud which can lead to material misstatements in the financial statements.
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