The obligation that an auditing firm has to a paying client while owing an objective, third-party assessment of that client's financial stability to stakeholders and potential investors represents a potentially significant conflict of interest.

Question

Quizplus · Accepted Answer

Auditing firms have a duty to provide an honest and unbiased assessment of their clients' financial statements, but they also have a responsibility to their paying clients. This can create a conflict of interest between their duty to provide accurate information to stakeholders and potential investors and their obligation to their clients.

The Obligation That an Auditing Firm Has to a Paying