Question #$1(16$ points$)$:

a$)$ The governor of the Kingdom of Monrovia has asked for your expert advice on how their

emerging economy and new stock market might benefit from requiring audits of

companies that operate in their kingdom. Focusing on information we have discussed in

class, what are:

Three $(3)$ benefits that Monrovia and its residents will receive as a result of requiring

company audits?

Three $(3)$ possible negative outcomes that could result from NOT ${?}_{(}())$ requiring audits.

b$)$ The governor of Monrovia has heard of the notion of independence being important for

auditors but has asked you to explain it to him. Provide:

A definition of independence for auditors and an explanation of why it is important to

the audit profession. Include the notions of independence in fact and independence in

appearance in your definition.

Two $(2)$ examples of situations that violate independence for auditors that we have

discussed in class.