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Why Is Three-Party Accountability an Important Distinguishing Feature of Auditing

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Why is three-party accountability an important distinguishing feature of auditing?


Definitions:

Board of Directors

A group of individuals elected by shareholders to oversee the management and governance of a corporation.

Shareholders

Individuals or entities that own shares in a corporation, giving them certain rights and a stake in the company's performance.

Journal Entry

A record in accounting that shows the financial transactions of a company in terms of debits and credits.

Cost Method

An accounting approach where investments are recorded at their acquisition cost, with income recognized only when dividends are received from the investee.

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