![]() ![]() Maintain independence, but to a company’s audit committee. Independence by which an external auditor reports not to aĬompany’s management, which could make it more difficult to The center goes on to identify a key practice to protect Independence: “Auditors’ independence from company management isĮssential for a successful audit because it enables them toĪpproach the audit with the necessary professional The nonprofit Center for Audit Quality explains auditor To be employed by a different company so that there is TheĪccounting department of a company and its auditors are employees Of standards known as Generally Accepted Auditing Standards. The auditor conducts the audit under a set Statements are reasonably stated under the rules of appropriateĪccounting principles. The role of theĪuditor is to examine and provide assurance that financial That auditing is not the same as accounting. The PCAOB is the organization that sets the auditing When a publicly traded company in the United States issues itsįinancial statements, the financial statements have been audited byĪ Public Company Accounting Oversight Board (PCAOB) approvedĪuditor. The basics of accountingĭiscussed in this chapter are the same under either set of States, whether US GAAP or IFRS are used. The SEC regulates theįinancial reporting of companies selling their shares in the United Report their financial statements using IFRS. Some companies that operate on a global scale may be able to The SEC not only enforces theĪccounting rules but also delegates the process of setting As a result, financial statement users are more Or IFRS, information presented publicly is considered comparableĪnd reliable. By having proper accounting standards such as US GAAP Regulating stock markets, and ensuring companies adhere to GAAP That is charged with protecting the interests of investors, You also learned that the SEC is an independent federal agency Regulated by the Securities and Exchange Commission (SEC). The United States) have the reporting of their financial operations Publicly tradedĬompanies (those that offer their shares for sale on exchanges in International Financial Reporting Standards (IFRS). ![]() International accounting rules are called If US accounting rules are followed, the accounting Rules that guide the preparation and presentation of financial Principles (GAAP), for both public- and private-sector businessesĪs you may also recall, GAAP are the concepts, standards, and Nonprofit organization that sets the standards for financialĪccounting and reporting, including generally accepted accounting Introduction to Financial Statements, you learned that theįinancial Accounting Standards Board (FASB) is an independent, ![]() \)Īccounting Principles, Assumptions, and Concepts ![]()
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