This is a 2 part questions, please do not answer one without the other . 1. ABC

Question

This is a 2 part questions, please do not answer one without the other.

1. ABC Corporation just became a public corporation when shares of its stock were sold to the public three months ago. A new board of directors has been appointed to govern the corporation. Assume that you will be giving a presentation to the board members on their responsibilities for IT systems. In bullet form, please list items that you would include in the report.

2. Who is ultimately responsible for the preparation of financial statements; the external auditor (CPA) or management? Why it is important to determine the roles and responsibilities of the CPA versus management concerning financial statements?

Explanation / Answer

1.

2. Preparation of financial statement is the primary responsibility of the management. Auditor is required to express an opinion that financial statement is prepared in accordance with the financial reporting framework and gives a true and fair view of state of afairs of the entity. Thus, management is ultimately responsible for the preparation of financial statement.

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