Question - Public company has to hire a CPA firm to conduct an annual audit on its financial statements. Auditor performs the audit to render his or her opinion on the reliability of the information contained within the financial statements. An audit firm must evaluate the client and the engagement according to professional standards.
Conduct a preliminary search on the performance of an annual audit by CPA firms on public companies records and discuss the following:
Should this evaluation be done on new and existing clients every year? Why or why not?
What is the objective of this evaluation?
What is involved in the evaluation process?
Do you think this evaluation is an effective method to assess clients? Why or why not? What is the focus of the assessment?