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In a discussion between Ballet: and Rajoo. two students in auditing class, Salleh made the following statement: An auditor is a professional person who is

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In a discussion between Ballet: and Rajoo. two students in auditing class, Salleh made the following statement: \"An auditor is a professional person who is licensed by the Minister of Finance for the purpose of providing independent expert opinion on the fairness of nancial statements. In order to maintain an attitude of mental independence and objectivity tlu'oughout the audit work, it is advisable that the auditor not to hang out with client personnel. The auditor should be enormous but reserved and dignified at all times. Involving in social activities with ciients outside of business hours will make it more difficult to be objective if the auditor nds evidence of fraud or accounting malpractices." Rajoo replied: \"You are too much behind the times, Salleh. perhaps 50 years backward. Auditors and clients are both human beings. Auditors need the cooperation of the client to do a good job. To rne1 nothing is wrong to hang out with clients. It will make the relationship be more relaxed and friendly rather than cold and impersonal. Aer all. it is the management who will pay the audit fees and you know what. the audit fee is nothing more than just unnecessary additional cost to businesses. To me, auditor independence is solely the attitude of mind. As long as auditors can maintain their mental independence, it doesn't matter whatever other people would say" REQUIRED: (a) State FOUR [4) situations where a perstm is prohibited from accepting an appointment as an auditor of a company. (4 Marks} (b) Explain why auditors not only must be independent but also must be competent. {4 Marks} (C) Distinguish independenceinfirm and indejuendence-In-appeamnce. (4 Marks} (d) Discuss TWO (2) pros and TWO (2) cons of both Salleh and Rajoo's views. (5 Marks}

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