Because they operate the business on a daily basis, a company's management knows more about the company's transactions and related assets, liabilities, and equity than the auditors.

Question

Quizplus · Accepted Answer

This is generally true, as the management team is responsible for maintaining records of transactions and financial statements, while auditors review and test these records to provide an opinion on their accuracy and completeness. However, auditors must still have a thorough understanding of the company's operations and financial reporting processes to effectively perform their duties.

Because They Operate the Business on a Daily Basis, a Company's