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Does anyone know what relevance&reliability do to external auditing? I just couldn’t find relevant info from textbook.
Hi @potato
I neither found straight chapter regarding this issue.
But I would say a lot of factors influence on reliability of external auditing.
Are the auditors independent from the company, how much?
Are they professionals? For example, report of Big4 auditors would seems more reliable than report of Mr.Someone.
Do auditors have much knowledge and experience in certain business market? For example, one audit company could have great experience in auditinf of agriculture entities. The same time they maybe won’t have such deep knowledge for chemical industry entities.external auditors are also able to perform an effective audit if they can place reliance on the internal controls of the organisation. Without a strong control framework and control environment in place, auditors cannot place reliance on it… the domino effect being that shareholders not receiving value for the audit since the auditors could not run comprehensive audit tests and/or obtain sufficient and appropriate audit evidence..
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