Liuting Han
Accounting 439, Sec #01
Assignment #1

1-25:
The objective of external auditing is to provide opinions on the reliability of the financial statements and, as a part of an integrated audit, provide opinions on internal control effectiveness. The overall objective of external auditing is to ensure that the financial statements of an organization are correct and are in order.

The external audit is intended to enhance the confidence that users can place on management-prepared financial statements. When the auditor has no reservations about management’s financial statements or internal controls, the report is referred to as an unqualified audit report. If the auditor had reservations about the effectiveness of the client’s internal controls, the auditor would issue an adverse opinion on internal controls. The auditors should find fraud, require accounting principles that best portray the spirit of the concepts adopted by accounting standard setters, and be independent of management. Managements need the unbiased and correct financial information to make operational decisions. Shareholders need the information to decide to invest or not. Tax authorities need the information to determine taxable income.

1-31: a) Describe the unethical actions of Susan Birkert.
Susan Birkert told her friend the stock of Cometech Corporation that she was auditing was a good investment. Also, she agreed to her friend to purchase stocks on her behalf and she gave her friend $5,000 to make the purchase under his name rather than hers, because this way can keep independent.

b) Compare and contrast the ideas of independence in fact and independence in appearance in the context of his case.
Susan Birkert does not act independently but she appears independent, so this case was the ideas of independence in fact. Tthose stocks that purchased by her own money