Short answers

1) How does the extended role of professional accountants affect the accounting profession?

2) Discuss the difference types of assurance that may be obtained in an assurance engagement?

3) An enhancing role of auditors has developed where the audit expertise is used widely to assist the client's needs. What are your views concerning the role described, with reference to the appearance of audit independence?

4) What is meant by comprehensive audit? Should a comprehensive audit be carried out by an independent auditor?

5) How do you think corporate collapses have influenced the role of auditing in recent years?

Professional Application Questions

Question 1

Auditors perform audit attestation to enhance the credibility of the financial statements. However, it is quite impossible for the auditors to provide an absolute assurance regarding the subject matter on which they express their opinion.

Required:

a) Comment on the auditor's ability and methods in attesting the credibility of financial statements prepared by the governing party of an organization.

b) Explain what type of assurance an auditor should provide in a financial statement audit.

Question 2

Following are several activities performed by auditors:

1. Compilation of tax returns for clients

2. Preparation of the financial statements

3. Review of an investment prospectus

4. Assessment of a loss subsequent to the discovery of fraud

5. Evaluation of the social cost subsequent to an oil leakage.

Required:

Indicate the type of assurance for each of the activities.