Audit Responsibilities &Objectives

1. Auditors provide reasonable assurance that the financial statements are fairly stated, in all material respects. Questions are often raised as to the responsibility of the auditor to detect material misstatements, including misappropriation of assets and fraudulent financial reporting. What are the responsibilities of the independent auditor in the audit of financial statements?

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2. Assume that you are the audit assistant for E& L auditing firm. The firm signed an engagement letter with JL Clean Services for the first time. JL Clean has been in business for several years but over the last two years has struggled to stay afloat given the economic conditions. Based on your audit work, you have substantial doubt that JL Clean will be in business by the end of its next fiscal year.

Present your answer based on the following criteria:

1. CONDITION
2. MATERIALITY LEVEL
3. TYPE OF REPORT
4. COMMENTS