The profession has been criticized by politicians for its role in monitoring potential corporate failure. Radical reforms have been called for the way in which the audit is regulated. For example, politicians have stated there should be a change of legislation in the following ways:

• Auditing standards – Auditing standards should be set and enforced independently from the accounting profession by an external regulator.

• Fraud – Auditing firms should have a specific duty to detect and report fraud.
• The duration of the appointment of auditors – The appointment of auditors should be for a maximum period of seven years.

Required:

Discuss the reasons why you feel that the audit profession might be open to criticism in the above areas.