You are one of three partners who own and operate Mary's Maid Service. The company has been...

Question

You are one of three partners who own and operate Mary's Maid Service. The company has been operating for seven years. One of the other partners has always prepared the company's annual financial statements.

Recently, you proposed that the statements be audited each year because it would benefit the partners and prevent possible disagreements about the division of profits. The partner who prepares the statements proposed that his uncle, who has a lot of financial experience, can do the job at little cost.

Your other partner remained silent.

Required: What position would you take on the proposal? What would you strongly recommend?

Khushboo · Accepted Answer

In this case, the other partner who is preparing the financial statements of the entity has suggested refe
ing his uncle for an audit of financial statements. The third partner is not having any comment or reservation on the audit of annual accounts by his uncle and he is silent. As per standard procedures, the audit should be performed by an independent person and he should not have any conflict of interest with the organization. The audit is performed to ensure that all the transactions are recorded appropriately...

You are one of three partners who own and operate Mary's Maid Service. The company has been operating for seven years. One of the other partners has always prepared the company's annual financial...

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