The Role of Public Accounting in Providing Assurance and Managing User Expectations

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The Role of Public Accounting in Providing Assurance and Managing UserExpectationsWeek2–DQ 1Why is public accounting often viewed as a guarantor of results, or even as a providerof assurance that one’s investment is of high quality? To what extent is it reasonable toview the auditor as a guarantor? Explain. To what extent do you believe that userexpectations of the public accounting profession appear to be unwarranted? Explain.Response #1I do not think viewing a public accounting or an auditor for that matter as a guarantor ofresults is fair. Instead, auditors should be viewed as those responsible to plan and performan audit to obtain reasonable assurance that the financial statements are free from materialmisstatement. In other words, auditors provided, “Reasonable assurance but not aguarantee that financial statements are free from errors or misstatements. Auditors do notreview all financial statement documents, instead they perform the audit on a test basis togain comfort over the financial statements. Furthermore, auditors do address the quality ofan investment, they provide an opinion that the financial statements present to within amaterial amount the company’s financial results. On the other hand, the extent to which itis reasonable to view the auditor as a guarantor is high. There are some reasons for this, forexample, when audits are performed by third party companies who begin the audit processwithout assertion to how the entity should be operated. Another reason is that they are theonly individuals people can trust to provide an accurate description of the company. I donot believe that all users (management, creditor, shareholders, etc.) of the publicaccounting profession appear unwarranted. I think they all have their own interpretationsand purposes of a particular data. Common sense tells me that not everyone view financialreports in the same manner or for the same purpose.Response #2

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