1. You have just been approached by the newly-appointed senior regulator for the financial services (including accounting and auditing) industry in a country which has previously taken a casual approach to adopting international accounting and auditing standards. The regulator has said that his first priority is to improve the quality of annual financial statements. The regulator has established working parties to examine improvements in the quality of accounting and financial reporting practices. Another working party has been established to examine the quality of audit field-work. The regulator tells you that he wants your working party to put forward proposals which will improve the quality of audit reporting. He is concerned that present practices allow individual auditors to report in their own way. This ha confusion since there are so many different styles of audit report. Th 2/6 believes that a standardised approach will reduce this confusion. He is there are international auditing standards on auditing and asks you to exa.. possibility of adopting an approach consistent with the international standards. He specifically asks you to look at the possibility of requiring auditors' reports to include as a minimum the following specific aspects of audit reporting: To whom the audit report is addressed A reference to the framework of accounting A reference to the framework of auditing Some discussion of what can be and what cannot be expected from an audit, and The style of opinion on the financial statements. The regulator also invites you to suggest any other issues you think might be relevant to improving the usefulness of auditors' reports. Required: a) Draft a report from your working party on the specific issues mentioned above. (15 marks) b) Draft an appendix to this report setting out the advantages and disadvantages of a standardised approach to audit reporting. (10 marks) 1. You have just been approached by the newly-appointed senior regulator for the financial services (including accounting and auditing) industry in a country which has previously taken a casual approach to adopting international accounting and auditing standards. The regulator has said that his first priority is to improve the quality of annual financial statements. The regulator has established working parties to examine improvements in the quality of accounting and financial reporting practices. Another working party has been established to examine the quality of audit field-work. The regulator tells you that he wants your working party to put forward proposals which will improve the quality of audit reporting. He is concerned that present practices allow individual auditors to report in their own way. This ha confusion since there are so many different styles of audit report. Th 2/6 believes that a standardised approach will reduce this confusion. He is there are international auditing standards on auditing and asks you to exa.. possibility of adopting an approach consistent with the international standards. He specifically asks you to look at the possibility of requiring auditors' reports to include as a minimum the following specific aspects of audit reporting: To whom the audit report is addressed A reference to the framework of accounting A reference to the framework of auditing Some discussion of what can be and what cannot be expected from an audit, and The style of opinion on the financial statements. The regulator also invites you to suggest any other issues you think might be relevant to improving the usefulness of auditors' reports. Required: a) Draft a report from your working party on the specific issues mentioned above. (15 marks) b) Draft an appendix to this report setting out the advantages and disadvantages of a standardised approach to audit reporting. (10 marks)