Explore BrainMass

Discuss the CPA's role as an external auditor

The financial statements are the representation of management.

How can investors and other third parties trust this information? Discuss the CPA's role as an external auditor.

Do research on the Internet and show the reference for the information.

I just need to get started here - thank you.

Solution Preview

Trusting financial statements for a company is a tricky task that cannot always be guaranteed for accuracy and be an exact representation of the company's financials. History has shown that even top accounting firms have done unethical practices that later cost the company in not only its reputation but also closed its doors costing employees and shareholders all that they have put into said company. Investors and others looking to invest in companies should do their homework and research the company through investor sights, better business bureaus and other areas that would most likely have information available that shows how the company pays its bills and whether or not the company is profitable and worth investing in too. Talking with employees, vendors and customers, if ...

Solution Summary

The following posting discusses the CPA's role as an external auditor.