Bankers who are processing loan applications from companies seeking large loans will probably ask for financial statements audited by an independent CPA because
A) Financial statements are too complex to analyze themselves.
B) They are too far away from company headquarters to perform accounting and auditing themselves.
C) The consequences of making a bad loan are very undesirable.
D) They generally see a potential conflict of interest between company managers who want to get loans and the bank's needs for reliable financial statements.

Question

Quizplus · Accepted Answer

Bankers who process loan applications are primarily concerned with obtaining reliable financial statements. When financial statements are audited by an independent CPA, it ensures the accuracy and reliability of the information contained in the statements. Additionally, auditors are able to detect and report any potential conflicts of interest or irregularities in the financial statements. Given the potential consequences of making a bad loan, banks need to ensure that they have a clear and accurate understanding of a company's financial position before advancing large sums of money.

Bankers Who Are Processing Loan Applications from Companies Seeking Large