transparency of information, to reduce the chance of problems occurring from incorrect information. An audit is a type of assurance service. In the context of an Assurance engagement process, external auditors provide assurance within the concept of agency. Required: Discuss the concept of agency and explain how the auditor provides assurance with suitable Practical Examples. (5 marks) Note: In your answer, you need to include the discussion of agency relationship, along with its connection between shareholders, Board of Directors and external auditors in a listed company using some practical examples. Q2. The Managing Director of Muscat Traders LLC, Mr. Humaid said al Harthy, says he is fed up with you, the external auditor. He has frequently complained that the audit provides no benefit to him as Owner-Manager. During the final audit last year you discovered that Mr.Humaid had been withdrawing funds from the business which he refused to disclose as Directors remuneration and therefore you were obliged to qualify your audit opinion. Mr Ahamed intends to remove you as auditor. Required: (a) Do you think external audit is compulsory for Muscat Traders LLC as per Oman legal requirements? Yes/No. justify your answer. (2 marks) (b) Discuss the purpose of an external audit and its role in the audit of large listed companies. (3 marks) (c) Do you think the rights and responsibilities of an external and internal auditor are same? Also explain in detail any three rights and duties of an external auditor. (2 marks) (d) Discuss the principal activities of auditors during the audit process in order that the auditor may give an opinion on financial statements with suitable practical examples. (3