ACC 421 Week 3 DQs__2 Sets of Answers
What are the limitations of using ratios for financial statement analysis? What are the benefits? Do different user groups focus on different ratios? Why? Which ratios would you use to analyze a company? Why?
What information is provided in the auditors’ report? Does the audit report offer any guarantees? Explain. What do you think the general public believes the auditors are providing in the audit report?
The topic of rotating audit firms every so many years has been discussed for years. Here is an article from 2011 discussing it:
What you are your thoughts on audit rotation? Why? If you are for it, how often do you think it should take place?
Here in 2013… a bill passed to prohibit it: http://www.journalofaccountancy.com/News/20138294
What are your thoughts on this?
What does full disclosure mean? How does full disclosure affect financial reporting? Are there any ethical implications to what must be reported in order to comply with full disclosure? Explain. What recommendations would you make to management regarding what must be disclosed?