Question 1 Study the scenario and complete the questions that follow: Auditors are regularly described as boring, conservative or more rudely as little grey men (or women)" or bean counters, a description which has grown out of the popular image of auditors, serious looking individuals, in their grey suits with laptops tucked under their arms! And yet, despite the slightly mocking image, there is a general acceptance that auditing is a serious business and that auditors have a very important role to play in society. Source: Jackson, R. D. C. and Stent, W.J. (2015). Aualting Notes for South African Students. Durban: LexisNexis. So important is the role of an auditor that the profession is regulated by the Companies Act 71 of 2008 and the Auditing Professions Act 26 of 2005. Auditors need to have complied with prescribed education, training and competency requirements and adhere to a code of professional conduct. In addition, an auditor can be refused registration with the Independent Regulatory Board of Auditors based on misconduct Indicate whether each of the following statements is true or false. Where you have selected false, provide a brief explanation. 1.1 The primary objective of the external audit of a company is to ensure that the company had complied with all the laws and regulations with which it must comply. 1.2 Directors report their custodianship of the business to the shareholders in the form of annual financial statements. 1.3 Assertions are the representations of the directors embodied in the annual financial statements. 1.4 Directors appoint the auditors of the business. 1.5 Shareholders and other users can assume that the amounts reflected in the annual financial statements of a company are 100% correct only if they have been audited properly. 1.6 Internal auditors are appointed by the external auditors. (10 Marks)