Explain why accurate accounting information and audited financial statements are important.
Accounting is the process of systematically collecting, analyzing, and reporting financial information. It can be used to answer questions about what has happened in the past; it also can be used to help make decisions about the future.
The purpose of an audit is to make sure that a firm's financial statements have been prepared in accordance with generally accepted accounting principles.
To help ensure that corporate financial information is accurate and in response to the accounting scandals that surfaced in the last few years, the Sarbanes-Oxley Act was signed into law. This law contains a number of provisions designed to restore public confidence in the accounting industry. Although many people think all accountants do the same thing, typical areas of expertise include managerial, financial, cost, tax, government, and not-for-profit.
A private accountant is employed by a private firm. A public accountant performs accounting work for various individuals or firms on a fee basis. Most accounting firms include on their staffs at least one CPA.
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