Friday, June 29, 2007

#15- Can auditors draft Financial Statements for client?

Can auditors draft (i.e. prepare) the financial statements for clients ?

The answer is No.

As mentioned in post #10, the nature & the responsibility of an auditor is to check, to scrutinize the financial statement prepared by the clients is not materially misstated. Auditors are the investigators.

Self-review threat to auditors' independency would be created if auditors are checking on what the auditors themselves are preparing. Auditors are supposingly to exercise its professional due care ( in ensuring integrity) & competence to ensure the accuracy of the Financial Statements.

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