MGT421H5 Study Guide - Midterm Guide: Financial Audit, External Auditor, Internal Auditor
Document Summary
Accounting = record, classify, summarize economic events = provide financial info to decision making. Auditing = collect + evaluate proof about info to determine + report on degree of correspondence b/w information + criteria culminate in audit report. Should be done by competent + independent person. Agency cost = cost paid to agent on behalf of principle. Report differ in nature must inform readers of degree of correspondence between information + established criteria. Auditor"s standard opinion associated w/ financial statements + customized report. Bias + motives of provider (agency cost) Auditor issue report relied on by users to reduce info risk external users provide capital client provide financial statement to user client client + audit committee hire auditor. Financial statement audit = determine whether overall f/s stated in accordance w/ specified criteria. Compliance audit = determine whether auditee compiled w/ specific laws, regulations, rules, provisions, etc. Operational audit = review part of organization"s operating procedure.
