In the past, companies often relied on accountants from their audit firms to assist in reconciling accounts, preparing the adjusting journal entries and writing financial statements. Small companies, in particular, often lacked the level of accounting sophistication necessary to carry out these tasks. Relying on the audit firm often made sense from the perspective of efficiency and cost containment.
But an increased focus on auditor independence has come about during the last decade. The standards generally restrict the non-attest services – such as tax or consulting services which auditors may perform and the circumstances under which those services may be allowed. The increased regulations serve to muddy an already often misunderstood set of expectations.
What auditors do
The outside, independent auditor is engaged to render an opinion on whether a company’s financial statements are presented fairly, in all material respects, in accordance with financial reporting framework.
To form the…
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