# 1 Audits are part of a business manager’s experience. Sometimes employees are fearful during an audit. Employees who have not made intentional mistakes but never the less are concerned that an auditor might find things wrong can sometimes experience anxiety during audits. It’s good when employees are comfortable with their auditors, and when this is the case then audits can be more pleasant for everyone.
Unfortunately there are occasions when an employee might be doing the wrong thing with accounts, and when this is the case auditors can often sense that something is amiss before the wrongdoing is discovered. Wolfe and Ference (2013) recommend that auditors document the advice that they give clients. A case in point is one where the CPA verbally discussed weaknesses in a business’ accounts payable system only to discover some time later that embezzlement was going on by the CFO and vendors. A lawsuit resulted because the company said that the CPA never informed them of the weak A/P system (Wolfe & Beckett, 2013).
If auditors do document the advice they give clients on an informal basis, then I think this can be a good internal control for the business as well as protection for the CPA. When things are in writing, management has a due diligence to address and consider issues that they might otherwise put aside.
Class: Can you share your experiences of going through an audit, or perhaps conversing with auditors? Please give examples of advice they might have given you that helped you do a better job. 150-200 words
#2 What are classified as balance sheet? What are financial reporting concepts? 200 words