@@PatrickLeeCPA this is pretty much common sense to me lol . You do an amazing job explaining this. I'm self employed and file my own taxes for about 10 years now. i have always been interested in what auditors do. When i cant do physical labor i think i want to become an auditor .
Hello sir, i wonder... 1) Who is Audit committee? Can shareholders appoint the auditor? (5:40) 2) What is risk assessment? (7:10) 3) Is it similar between "qualified opinion" and "modified opinion"? (9:50)
The audit committee are members of the Board of Directors. In the most simplist terms, if the board of directors has 12 people on it, then maybe 3 of the 12 will serve on the audit committee. Theoretically, the shareholders elect the board of directors and then the board of directors will appoint individuals to the different committees the board of directors have. Typically as part of the board of directors there is a nominating committee as well that helps nominate board of director members to the board that the shareholders vote on so the shareholders may not appoint the board of directors directly, but indirectly they do. The audit committee recommends an auditor, so the shareholders do not necessarly appoint the auditors, but the shareholder's vote to approve the recommendation of the audit committee on who the auditors should be. Risk assessment is the process by looking at a company and finding what risks the company has, whether actual or assumed. Qualified and modified opinion are basically the same. The real name is qualified opinion, but I have seen so many people call it a modified opinion because essentially that is what it is.
