In a civil litigation involving the administrator of MX Globo, a bankrupt brokerage firm and Big 4, a reputable global auditing firm, Saul Soro, a lawyer for MX Globos administrator, put up a slide showing MX Globo and its seal of approval from Big 4 at the center of a relationship of trust in which regulators, lenders, exchanges, credit rating agencies and various other parties relied on the accuracy of the companys audited financial statements. MX Globo former CEO even testified in court that this relationship of trust was a condition for the other parties of doing business with MX Globo? Per Soro, Big 4 had one job to properly audit MX Globos financial statements and give credibility that those statements were fair and accurate. But Big 4 botched its job. For its defense, Big 4s attorney argued that MX Globo failed because of its management business decisions and that as an independent audit firm, Big 4 was not hired to give business or strategic advice.

Required:

1. Explain briefly how the Big 4 audit of MX Globos financial statements contributed to the relationship of trust referred to above? Do you believe that Big 4 botched its job as mentioned by Saul Soro?
2. Explain how Big 4 audit of MX Globos financial statements facilitate its transactions with the other parties?
3. Explain briefly what is the purpose of an audit of MX Globo's financial statements?
4. What did MX Globos management fundamentally asserted by agreeing to an audit of the companys financial statements by Big 4? Briefly comment of Big 4s lawyer statement that the firm, as an independent auditor, was not hired to give business or strategic advice?
5. Following the gaffe during the presentation of best picture at the Academy Awards (i.e. the Oscars) in February 2017, assumed that Big 4 referred to above was invited to bid and subsequently obtained the Oscars engagement from the Academy for February 2018. Briefly explain, what type of engagement (i.e. attest, assurance, other, etc.) would they perform based on your knowledge of the Oscars?