Audit Concepts $(10$ marks$)$

You recently overheard the following conversation between two senlor auditors working at Cartman, Simpson, and Griffin LLP:

Peter Parker: 'Its impossible to know the needs of all the users of a company's financial statements. For example, how $-$ or even why $-$ should I know that a labor union or a bank might use the financial statements of a company I am auditing?$-$

Pepper Potts; "You have to know the needs of those users; otherwise. you cannot determine whether the accounting for a particular transaction might be material for a user:"

Peter Parker: Well, I can't know them all, so l$\text{'}$ll concentrate on the primary sharcholders as bank lending officers. They're the most important. Besides management makes the decision as to what constitutes fair presentation. I$\text{'}$m merely auditing their financial statements. People sometimes just expect too much from us auditors."

Pepper Potts: "True, people do expect too much from us$,$ I dorit want to be called to the court for not meeting all users' needs. However, It is difficult to understand all user's' needs. Besides, each stakeholder group seems to want different things, and you can't meet them all. If profits are high, labor would want higher wages, and the tax authorities want more taxes. And management would want to keep reported profits down. I guess we just have to rely on Canadian Generally Accepted