Degree of external auditor contribution in reducing the gap of information risk between owners and managers

Abstract

the great expansion in economical activities the increasing in production of establishment and the separation of ownership from administration all that make the administration to be responsible in making important decisions. the administration sometimes make decisions serve their interests which may lead to asymmetry in information.therefore we are in need to an independent side. So we can depend on external auditors to ensure that the information in financial statement represent the results of the establishment activity in justice. This research aim to show the role of the external auditor who can reduce the risk of information. The research is based on a main hypothesis, which is the external auditor has a role in reducing the risk of information between owners and managers The research adopts descriptive qualitative analytic method by using questionnaire. Aquestionnaire is distributed to many external auditors to collect information about thr subject. Through this paper the researcher achieved that the external auditor has the ability to balance between the owners interests and the managers which will readuce the risk of accounting information in financial statement this reseach also show that the objectivity and impartiality of the auditor plays vital role in achieving justice for all