Auditing and Accounting

Running head: AUDITING AND ACCOUNTING
Auditing and Accounting
Name of the Student
Name of the University
Author Note

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AUDITING AND ACCOUNTING
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Answer A.....................................................................................................................................3
Answer B.....................................................................................................................................4
Answer C.....................................................................................................................................5
Conclusion.......................................................................................................................................5
References........................................................................................................................................6

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AUDITING AND ACCOUNTING
Introduction
Auditing is the process of investigation and examination of the financial statements of
organizations to make sure that the records are true and fair (William, Glover and Prawitt 2016).
The auditor assures that the statements are accurate and free from any kind of frauds and errors
and submits the audit report.
In the given case, the president of a hi-tech software and games company has appointed
the auditor to get its accounts checked. The company is a private company with $500 million
shares and $200 million assets is willing to go public and raise capital of $25 million through
issue of shares. The discussion deals with whether the audit firm will take up the audit of the
company or not after investigating into details.
Discussion
Answer A
The firm before performing the audit for its client must go through certain sources to obtain
informations of the company, which are as follows:
 Understanding the company environment: the firm should primarily understand the
various regulations and policies of the company. They should also go investigate into the
entity rights and obligations and analyze their procedure of performance.
 Inspections of records and documents: Inspection includes examination of the records
and documents both internal and external. The documents may be in paper form or may
be in electronic form. This helps in understanding the reliability and nature of the