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Advantages a firm gains by obtaining auditing services

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What are the advantages a firm gains by using auditing and assurance services? How might you use these advantages to promote the auditing and assurance division within a company?

In the case of question number 1 there is certainly a "fear" factor that is involved with auditors. This certainly could be a motivator for some companies and/or employees. However, what does management have as an advantage if they request a financial statement? Is there are difference if the company is public as compared to a private company?

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Q: What are the advantages a firm gains by using auditing and assurance services?

A: There are several advantages. Outsiders are more likely to believe an independent party so the audit increases the confidence in the data. An audit can find and fix errors, give you some ideas what other firms are doing, and let management know the level of competence in the financial reporting system. An audit can also be a deterrent to those that might be tempted. Knowing the auditor will be coming, they might be less likely to attempt to steal or ignore policies.

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Solution Summary

Your tutorials is 315 plus a reference and discusses the benefits of an external audit, how audits might impact workers versus managers and whether the ownership structure (public, private) changes the audit advantages.