(Relationship between accounting and comprehensive auditing) Listed below in alphabetical order are the steps that are included in preparing and completing a comprehensive audit and distributing financial statements.

• 1.Analyze events and transactions.
• 2.Assess the risk of material misstatement in managements financial statements.
• 3.Classify and summarize recorded data.
• 4.Communicate findings to management and the board of directors through other required communications and assurance services.
• 5.Distribute financial statements and auditors report to stockholders in annual report.
• 6.Evaluate reasonableness of accounting estimates.
• 7.Express opinion through auditors report and other communications.
• 8.Measure and record transaction data.
• 9.Perform risk assessment procedures including understanding the business and its internal controls.
• 10.Prepare financial statements per GAAP.
• 11.Obtain and evaluate evidence to respond to risks of material misstatement in the financial statements.
• 12.Obtain reasonable assurance that financial statements are presented fairly in conformity with GAAP.

Required

• A. Prepare a diagram of the relationship between accounting and auditing in the preparation and audit of financial statements. Show each of the steps in the proper sequence.
• b. Management and the independent auditor share the responsibility for the assertions contained in financial statements. Evaluate and discuss the accuracy of this statement.

c. Public companies hire auditors because of a requirement to comply with the rules of the SEC. Evaluate and discuss the accuracy of this statement