Trusted by millions of Kenyans
LoginRegister
Study resources on Kenyaplex

Get ready-made curriculum aligned revision materials

Exam papers, notes, holiday assignments and topical questions – all aligned to the Kenyan curriculum.

Browse exam papers
Or go directly to:
Class notes Holiday assignments Topical questions Other resources

What actions do auditors take which are not in the best interests of the shareholders that may cause agency problems or conflict to arise?

What actions do auditors take which are not in the best interests of the shareholders that may cause agency problems or conflict to arise?

Answers

Lellah
1. Collusion with the management – auditors may collude with the management in performance of their duties such that they don’t give a true and fair view of the business financial position.
2. Charging high fees – although the law determines the percentage that an auditor can charge a client, auditors may still charge fees which are not commensurate with the work done.
3. Misleading the shareholders – auditors may issue unqualified reports which may be misleading to the shareholders leading to losses if the shareholders make decisions based on such information.
4. Lack of professionalism – auditors may fail to apply professional care and due diligence in the performance of their duties.
Lellah answered the question on November 8, 2021 at 06:43

Answer Attachments

Next: Describe the Physiological changes during pregnancy

Previous: Give the solutions to shareholders and auditors conflicts.

View more Introduction to Finance Questions and Answers  |  Return to Questions Index

Exams With Marking Schemes

Related Questions