Examining the Role of the CPA as an External Auditor

694 Words3 Pages
The CPA as External Auditor This essay examines the role of the CPA as external auditor and discusses their impact in on investor trust. The essay discuses investor goals in financial statement review, and their reliance upon the CPA to make certain that financial reports issued by companies provide reliable information. When individuals and companies make investment decisions, they rely on accurate information to help them arrive at their decisions. One source of information for potential investors is a company's financial statements. These statements provide information on company operations, efficiency, earning capacity and more. It is important that the information provided in financial statements be accurate and free of errors, omissions or misleading information. This is where the CPA, in the role of external auditor, performs an important function. Because financial statements are accounting reports, one of their purposes is to communicate financial information about a business entity to investors and other interested parties. Financial statements provide information on the business' financial position or status as well as financial changes during a period of time. They communicate to investors information about financial decisions that have been made (Woelfel, n.d.). Investors use the information in financial statements to help determine whether they should invest in companies or not. Investors look at financial statements to determine where a company's money
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