The amount of time spent verifying owners' equity is frequently minimal for private companies because:
A) there are few if any transactions during the year for the owners' equity accounts, except for earnings and dividends.
B) the few owners all have access to the books, so the auditor spends more time on accounts like liabilities, which affect outsiders.
C) these companies are so small that it is not necessary to audit the capital section.
D) there is no public interest in these companies.

Question

Quizplus · Accepted Answer

Private companies typically have fewer owners, and thus fewer transactions related to owners' equity. The auditor may focus their attention on accounts that have more impact on outsiders, such as liabilities. Furthermore, auditing the capital section may not be necessary for small or closely-held companies.

The Amount of Time Spent Verifying Owners' Equity Is Frequently