BUSN1-UC 544 Chapter Notes - Chapter 46: Tax Evasion, Engagement Letter, Audit
18 Mar 2014
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Business law ii - monday, august 12th notes. Private sector -> aicpa -> technical & ethical standards (relationship between accountant and client) > financial statements required for 3rd party to loan to client. 3rd party will not accept any unaudited financial statements because of fraud chance. 3rd party will require cpa, the independent 3rd party to audit the financial statements and express an opinion on it. Accounting firm has to be competent and sign off on it. Cpa firm can"t be dependent on the client, ethical issue. > cpa firm can"t accept gifts from client *unless it"s minor* Or it will lose appearance of being independent. Separation between client & cpa firm must exist. If 3rd party feels cpa firm isn"t independent, 3rd party won"t accept the financial statements. Maintaining independence = key to professional life of auditing. Competency must be possessed by cpa firm. If there"s fraud in cpa firms, they will be held accountable.
