Statement: The public and users of financial statements no longer trust the UK accounting profession to produce audit reports which are reliable. You are required: To prepare a report of approximately 1750 words addressing, as a minimum, the following four topics so far as they concern the audit of financial statements in the UK: The perceived failures by UK auditors and regulators in the last four years that have brought about the lack of trust referred to in the statement above. (15 marks) How the so called expectation gap contributes to that perception and that gap might be narrowed so as to change the perception. (30 marks) It is often suggested that audit only firms will improve audit quality do you agree? (30 marks) The UK Competition and Markets Authority has proposed requiring that FTSE350 listed company audits should be undertaken by joint auditors, one from a big 4 firm and one from a smaller firm. Set out your views on whether this will make audit reports more reliable or not. (15 marks)
