SECTION B Answer ONE question and NO MORE THAN ONE further question from this section. Each question is worth 25 marks.

5. Identify and explain the similarities and differences between the audit of financial statements and an assurance engagement on a corporate social responsibility report.

6. Critically assess the factors which a court will take into account when deciding whether auditors should be held liable to pay damages to a third party for negligence in the conduct of an audit.

7. Identify the personal qualities which make for an effective auditor of financial statements and illustrate the value of each one with an example of a situation where that quality would enhance the value of the audit.

8. Critically examine the advantages and disadvantages of having concentration in the market for audit services where a small number of audit firms conduct the majority of the audits of large listed companies.