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Explain three causes of conflict between shareholders and external auditors.

Explain three causes of conflict between shareholders and external auditors.

Answers

Causes of conflicts between shareholders and external auditors
Auditors are appointed by shareholders to establish whether the financial statements are true and fair. Sources of conflicts may include;
(i) Collusion with the management, which compromises auditor’s independence.

(ii) Auditor issuing misleading report to the management and the public.

(iii) Auditors failing to exercise professional care and due diligence. This may lead to the auditor failing to detect errors and frauds which would have been detected.

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francis1897 answered the question on November 1, 2022 at 11:04

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