Compare the relationships among auditor, client, and externa
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Compare the relationships among auditor, client, and external users. How do professional standards for CPA's govern these relationships?
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Compare the relationships among auditor, client, and external users. How do professional standards for CPA's govern these relationships?
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Compare the relationships among auditor, client, and external users. How do professional standards for CPAs govern these relationships?
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Compare the relationships among auditor, client, and external users.
The auditor - client - external relationship is very intertwined, and also can become very complex. The auditor is expected to remain independent from the client (auditor independence). We can thank Enron for the lesson learned on auditor independence. When an auditor becomes too involved in the client company, independence can become compromised. When this occurs, several things can happen. The auditor can overlook, due to a false sense of trust, critical components of the audit, believing that there is no reason necessary to test the accounts as thoroughly as the auditor would have, had that false sense of trust not been established.
Auditors oftentimes, due to a lack of independence, take shortcuts in the audit. Those shortcuts oftentimes lead to disaster, because critical factors again can be ...
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