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United Airlines is one of the largest airlines in the world, serving millions of passengers each year. As a publicly traded company, United is required by law to undergo regular audits to ensure that its financial statements are accurate and reliable. But who exactly is responsible for conducting these audits?
The answer is that United Airlines is audited by one of the “Big Four” accounting firms: Deloitte, PwC, EY, or KPMG. These firms are known for their expertise in financial auditing and are trusted by companies around the world to provide independent, objective assessments of their financial statements. In this article, we’ll take a closer look at how these audits work and what they mean for United Airlines and its stakeholders.
Who Audits United Airlines?
United Airlines is an American airline company that operates both domestically and internationally. As a publicly-traded company, it is subject to regular audits from various auditors to ensure compliance with financial regulations and to maintain transparency for its shareholders. In this article, we will explore who audits United Airlines and what their roles are in ensuring the company’s financial health.
Internal Auditors
Internal auditors are employees of United Airlines who are responsible for reviewing the company’s financial records and procedures to ensure compliance with internal policies and external regulations. They report to the company’s board of directors and senior management, and their primary function is to identify and mitigate risks that could lead to financial losses or reputational damage. Internal auditors also provide recommendations for improving processes and controls to enhance the company’s overall performance.
There are several benefits of having an internal audit function, including:
- Increased transparency and accountability
- Early detection of potential issues or fraud
- Improved risk management
- Enhanced operational efficiency
External Auditors
External auditors are independent accounting firms that are engaged by United Airlines to perform an audit of the company’s financial statements. They are responsible for examining the financial records and reporting whether they are accurate and comply with the generally accepted accounting principles (GAAP). External auditors also provide an opinion on the company’s internal controls and report any deficiencies or weaknesses that they find.
There are several types of external auditors that United Airlines may engage, including:
- Big Four accounting firms: Deloitte, EY, KPMG, and PwC
- Mid-tier accounting firms: BDO, Grant Thornton, RSM, and Crowe
- Specialized accounting firms: focused on specific industries or types of audits, such as IT audits or sustainability audits
The benefits of having external auditors include:
- Increased confidence in the accuracy of financial statements
- Greater transparency and accountability to external stakeholders such as shareholders and regulators
- Identification of areas for improvement in financial reporting and internal controls
- Detection of potential fraud or other financial irregularities
Regulatory Auditors
In addition to internal and external auditors, United Airlines is subject to audits by various regulatory bodies. These audits are focused on ensuring compliance with laws and regulations that govern the airline industry, such as safety regulations, environmental regulations, and consumer protection laws.
Some of the regulatory bodies that audit United Airlines include:
- The Federal Aviation Administration (FAA)
- The Environmental Protection Agency (EPA)
- The Department of Transportation (DOT)
The benefits of regulatory audits include:
- Ensuring compliance with laws and regulations
- Protecting the safety and well-being of passengers and employees
- Promoting environmental sustainability
- Enhancing consumer protection
Conclusion
In summary, United Airlines is subject to audits from various auditors, including internal auditors, external auditors, and regulatory auditors. Each of these auditors plays an important role in ensuring the company’s financial health and compliance with laws and regulations. Internal auditors provide ongoing monitoring and risk management, while external auditors provide independent assurance on the accuracy of financial statements. Regulatory auditors ensure compliance with laws and regulations that govern the airline industry. Together, these auditors help to maintain transparency, accountability, and confidence in United Airlines’ operations and financial performance.
Contents
- Frequently Asked Questions
- What is auditing?
- Why do companies need auditing?
- Who are the big four auditing firms?
- How are auditors selected?
- Which auditing firm audits United Airlines?
- United Airlines CEO talks airfares, delays, passenger compensation
- What Is United Airlines Slogan?
- The Top 5 Destinations To Explore With United Airlines
- What Are United Regional Airlines?
Frequently Asked Questions
What is auditing?
Auditing is an independent examination of financial statements, records, operations, and performance of an organization or business entity. It is conducted by a certified public accountant or a qualified auditor.
The objective of auditing is to provide an opinion on the financial statements’ fairness and reliability, including whether the financial statements are free of misstatement due to fraud or error.
Why do companies need auditing?
Companies need auditing to ensure the accuracy and reliability of their financial statements. Auditing provides an independent assessment of the financial statements and helps businesses to identify areas for improvement in their operations and internal control. Auditing also helps to maintain the integrity of financial data and prevent fraud.
Moreover, auditing is often required by lenders, investors, and regulators to provide assurance that the company’s financial statements present a true and fair view of its financial position, performance, and cash flows.
Who are the big four auditing firms?
The big four auditing firms are PwC (PricewaterhouseCoopers), Deloitte Touche Tohmatsu Limited, Ernst & Young Global Limited, and KPMG International Cooperative. These firms are considered the largest professional services networks in the world, providing audit, tax, consulting, and other services to clients in various industries and sectors.
They are known as the big four because of their global reach, market share, and reputation for quality and expertise in the field of auditing and accounting.
How are auditors selected?
Auditors are selected by the company’s board of directors or audit committee. The selection process involves evaluating potential auditors based on their qualifications, experience, reputation, and independence. The auditor must be independent and objective, with no conflicts of interest that could impair their judgment or compromise their integrity.
The auditor is then appointed by the shareholders at the annual general meeting, and their engagement is typically for a period of one year, subject to annual reappointment.
Which auditing firm audits United Airlines?
United Airlines is audited by Ernst & Young LLP, one of the big four auditing firms. Ernst & Young has been United Airlines’ auditor since 2013 and provides independent assurance on the fairness and reliability of the company’s financial statements.
Ernst & Young’s audit of United Airlines includes evaluating the company’s internal control over financial reporting, assessing the risk of material misstatement, and testing the accuracy and completeness of financial data and disclosures.
United Airlines CEO talks airfares, delays, passenger compensation
In conclusion, United Airlines is audited by some of the biggest and most reputable accounting firms in the world. These firms ensure that the airline’s financial statements and operations comply with accounting standards and regulations. With such rigorous auditing processes in place, United Airlines and its stakeholders can have confidence in the accuracy and transparency of the company’s financial reporting.
Moreover, the auditing of United Airlines plays a vital role in maintaining the trust and confidence of its customers, investors, and regulators. By ensuring that the airline’s financial reporting is accurate and transparent, auditing helps to build credibility and trust in the company. This is especially critical in the highly competitive and regulated airline industry, where trust and credibility can make a significant difference in the success of a company.
Lastly, the auditing of United Airlines also contributes to the overall stability of the airline industry. By ensuring that the financial reporting of airlines is accurate and transparent, auditing helps to promote a level playing field among airlines, which is essential for maintaining a healthy and competitive industry. Overall, the auditing of United Airlines is a critical process that serves the interests of the company, its stakeholders, and the industry as a whole.
