Your neighbor Loot Starkin invited you to lunch yesterday. Sure enough, it was no “free lunch” because Loot wanted to discuss the annual report of Dodge Corporation. He owns Dodge stock and just received the annual report. Loot says, “Our auditors prepared the audited financial statements and gave an unqualified opinion, so my investment must be safe.” Required: What misconceptions does Loot Starkin seem to have about the auditor’s role with respect to Dodge Corporation?
Answer to relevant QuestionsAudits may be characterized as (a) Financial statement audits, (b) Compliance audits, (c) Economy and efficiency audits, and (d) Program results audits. The work can be done by independent (external) auditors, internal ...What is operational auditing? How does the AICPA view operational auditing? Identify and briefly describe the three fundamental principles underlying GAAS.What are the four types of audit opinions? What is the conclusion of each one?Ordinarily, what source of evidence should least affect audit conclusions? a. External documentary evidence. b. Inquiry of management. c. Documentation prepared by the audit team. d. Inquiry of entity legal counsel.
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