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Financial accounting - Assignment Example
Finance & Accounting
Pages 4 (1004 words)
By upholding ethics in their auditing exercise, I think independent certified public accountants can maintain an independent audit engagement.By adopting the aspect of objectivity, that excludes prejudice and bias, auditors gives fair view of the company position…
In addition, through integrity, external auditors are required to avoid conflicts of interest when making their reports. In this way, their judgment will be imperative to the shareholders, directors, banks and other users of the audited reports. Question 2 One of the major factors to consider before investing in the biotechnology company is the profitability of the company. Through the audited financial reports, an investor will note the amount of profits and divided paid to the shareholders. In this way, an investor is at a good position to make an appropriate decision before investing in the company. Secondly, an investor should know the sources of finance adopted by the company. Companies that have wide range of sources of finance have a higher probability to survive in the current competitive business arena. Similarly, through various sources of finance, the concept of business as a going on concern is guaranteed since the company is financially stable. Another vital aspect that as an investor I will need to know is the management of the company. If the company has a strong management and auditing team and policies, it implies that financial position of the company is good thus guaranteeing high returns to the shareholders. Likewise, it is fundamental to have adequate information on the strategic plans of the company. ...
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