MGMT 138 Study Guide - Quiz Guide: Engagement Letter, Assurance Services, Financial Statement
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Mgmt 138 quiz#1 review: decision makers need more than just information; they need reliable and credible information that they can rely upon. Internet buyers rely on website information when purchasing online. investors use financial reports to help make investment decisions. Suppliers and creditors use financial reports to decide whether to give trade credit and bank loans. Labor organizations use financial reports to help determine a (cid:272)o(cid:373)pa(cid:374)(cid:455)"s a(cid:271)ilit(cid:455) to pa(cid:455) (cid:449)ages. Government agencies and congress use financial information in preparing analyses of the economy and in making laws concerning taxes, subsidies. But because of the asymmetry of information, such as the adverse selection situation when sellers have information that buyers do not about the products, the information risk exists. Toda(cid:455)"s audito(cid:396) pla(cid:455)s a (cid:272)(cid:396)u(cid:272)ial (cid:396)ole i(cid:374) (cid:271)usi(cid:374)ess a(cid:374)d so(cid:272)iet(cid:455). Users rely on independent information assurors such as cpas to reduce information risk.
