Describe five steps independent auditors take when auditing an organization.

-An independent auditor, often a public accounting firm, begins an audit by studying the business. This approach helps to ensure that the audit achieves the objectives.

- The independent auditor determines that the method of accounting for items recorded on financial statements complies with appropriate accounting rules, IFRS or GAAP.

- The auditor completes the process by issuing a report to the board of directors that discusses items of interest arising from the audit and may issue an opinion about the relevance, completeness and accuracy of the financial statements and supporting notes. In addition to the report to the board, the auditors will provide a letter to the management of the organization that discusses significant policies, estimates, difficulties encountered, etc.

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Describe which three functions the income statement, also called the statement of earnings, the statement of operations or the profit and loss statement, summarizes.

-Revenues earned

- Gains and losses arising from conversions of assets and liabilities over an accounting period

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Describe eleven quantitative evaluation cost/benefit analysis methods and related issues.

-Break-even analysis

-Capital budgeting

-Payback period

-Net present Value

-Profitability Index

-Internal rate of return

-The need for multi-factor comparison

-Investment risk analysis

-Risk Adjusted Discount Rate

- Non-financial issues

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