You and your best friend are both majoring in accounting, and the two of you have had several courses together throughout your studies. Due to a scheduling conflict, you’re on your own in the auditing class, and loving the content so far! As you try to explain the class to your friend, it becomes clear that he doesn’t really understand the audit process. He asks you the following questions:
- Isn’t it the auditor’s job just to check the numbers and calculations on financial statements and find all kinds of fraud?
- Why do you need to understand the client’s business? Isn’t the CPA there to audit financial statements?
- What is the purpose of auditing an entity’s financial statements?
How should you respond to your friend’s questions?
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