9- Reliable accounting and financial reporting aids society in allocating resources in an efficient manner. Explain...

9- Reliable accounting and financial reporting aids society in allocating resources in an efficient manner. Explain why audits are demanded by society? Support your answer from the Annual report of 2019 of Saudi Aramco?

Expert Solution

The demand for auditing is because there is a need for accountability when business owners hire others to manager their business. Auditing is demanded because it plays a valuable role in monitoring contractual relationships between the entity and its stockholders, managers, employees, and debt holders.Financial statement users include investors (shareholders), suppliers, customers, lenders, employees, governments, and the general public. These groups of users demand audited financial statements because of their remoteness from the entity, accounting complexity, their incentives competing with those of the entity's managers, and their need for reliable informationon which to base decisions. The theories used to describe the demand for audit and assurance services are agency theory, the information hypothesis, and the insurance hypothesis.

Auditing provides assurance to investors and creditors that company funds are handled appropriately. ... By reviewing financial statements and digging into accounting records, auditors can determine whether the financial statements and records accurately depict the company's true financial profile.

Independent auditor’s report to the shareholders of Saudi Arabian Oil Company Report on the audit of the consolidated financial statements Our opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of Saudi Arabian Oil Company (the “Company”) and its subsidiaries (together the “Group”) as at December 31, 2019, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards, that are endorsed in the Kingdom of Saudi Arabia, and other standards and pronouncements issued by the Saudi Organization for Certified Public Accountants (SOCPA).

ekkarill92 answered 2 years ago

One of the differences between Managerial Accounting and Financial Accounting is reporting flexibility. Financial reporting is...

One of the differences between Managerial Accounting and Financial Accounting is reporting flexibility. Financial reporting is restricted by Generally Accepted Accounting Principles whereas reporting in Managerial Accounting has fewer rules. Why is it permissible to violate Generally Accepted Accounting Principles when preparing reports used strictly by company management? Should external users always have the same information as internal users?

Discuss how efficient the U.S. financial markets are in pricing financial securities. Are security prices reliable?...

Discuss how efficient the U.S. financial markets are in pricing financial securities. Are security prices reliable? What factors promote or reduce pricing efficiency? How can we account for significant pricing fluctuations?

Question one: Briefly explain the following statements: A) Accounting reporting may improve the allocation of resources...

Question one: Briefly explain the following statements: A) Accounting reporting may improve the allocation of resources in the economy. B) Natural and physical theories are built on the scientific approach, but we can't depend on it when we set accounting theory. C) Earning quality is the degree of correlation accounting income and economic income but earning management is the influence on reported income. D) There is overload problem in accounting standards. E) When accounting theory set, we should distinction between...

Use International Financial Reporting Standards. Research IFRS 28 and IFRS 9 in the accounting for investments...

Use International Financial Reporting Standards. Research IFRS 28 and IFRS 9 in the accounting for investments to answer the following questions related to Yahoo!’s investment on Alibaba Group (assume the fair value option is not elected): No calculation needed. a. How should Yahoo! recognize and measure its 46 percent ownership in Alibaba Group for the fiscal year ended December 31, 2005? b. How should Yahoo! recognize and measure its 24 percent ownership in Alibaba Group for the year ended December...

In financial accounting and rules of financial reporting 1. What are leases? 2. Why is reporting...

In financial accounting and rules of financial reporting 1. What are leases? 2. Why is reporting of them required? 3. What information is disclosed? 4. What does this information tell you about a company?

how are financial reports useful to external decision makers when allocating scarce resources?

Explain the relationship between bookkeeping and accounting in terms of accurate financial reporting and analysis

ACCOUNTING 3220 CORPORATE FINANCIAL REPORTING 1 Spring 2018 Assignment #9 – Noncurrent Liabilities This assignment is...

ACCOUNTING 3220 CORPORATE FINANCIAL REPORTING 1 Spring 2018 Assignment #9 – Noncurrent Liabilities This assignment is due at 9:00am Monday, April 30, 2018 regardless of your section. The assignment must be submitted electronically via D2L. DO NOT EMAIL ME YOUR HOMEWORK. You may submit your homework in Excel, Word, or .pdf style (not .zip or other). Please format the pages for printing and clearly state all group members’ names and section numbers on the first page. The assignment may be...

A) Explain the role of prices in allocating scarce resources in a market economy. B) Discuss...

A) Explain the role of prices in allocating scarce resources in a market economy. B) Discuss the view that that the use of maximum and minimum price controls only serve to distort markets and bring about a misallocation of resources.

How does financial accounting differ from financial reporting?

Question