Auditors need to be able to take an unbiased viewpoint throughout the audit process. Users of the
financial information issued would rely on this information if the auditors appear to be unbiased.
Rule 101 - Independence.
An error is an unintentional misstatement of the financial statements while a fraud is an intentional
misstatement. There is no distinction between the auditors responsilibility of finding either. They must
find reasonable assurance that the statement
Audit and assurance services are independent services that improve the quality of information for
Accounting and bookkeeping services CPA firms help many small clients with preparation of their
Tax services prepar
Growing awareness of the responsibilities of public accountants by users
An increased consciousness on part of the SEC for its responsibility of protecting investors
Complexity of auditing and accounting functions
Deep-pocket concept of liability
Type of Change
An error correction not involving an accounting principle
An accounting change involving a correction of an error in principle, which is
accounted for as a correction of an error
Risk-free interest rate the rate the bank could earn by investing in U.S. Treasury notes for the same
length of time as the business loan.
Business risk for the customer reflects the possibility that the business will not be able to repay its loan