Part A (30 Marks)

1. In late 2001 through 2002, the accounting profession faced a "crisis of credibility". Describe the events that led up to these crises.

(10 marks)

1. Evaluate the following quotation: "If a CPA firm completes a nonpublic company audit of Adam Company's financial statements following AICPA generally accepted auditing standards and is satisfied with the results of the audit, an unmodified audit report may be issued. On the other hand, if no audit is performed of the current year's financial statements, but the CPA firm has performed satisfactory audits in prior years, has confidence in the management of the company, and make a quick review of the current year's financial statements, a qualified report may be issued."

Do you agree? Give reasons to support your answer.

(10 marks)

1. Mr. John works as a manager in the Aster office of an international public accounting firm. His father has just taken a position as a purchasing agent for one of the public accounting firm's Aster clients. Has Mr. John's independence been impaired with respect to this audit client? Has the public accounting firm's independence been impaired if John does not work on the audit?

(10 marks)

Part B (70 marks)

Access the Huawei web page at: Huawei Annual Report - Huaweithen download the annual report 2020 in PDF Form.

Use the annual report to answer the following questions.

Go to "Report of Independent Auditor's Report"& answer the following questions. Read the report carefully.

1. The main responsibility of auditor is to express an opinion on whether management has fairly presented the information in the financial statements. Give some introduction on the functions of external auditor and provide reference from report. Explain the big 4 companies under auditing profession. Also name the external auditor of Huawei.

(10 marks)

1. 'CPAs provide a wide array of information enhancement services referred to as assurance services.' Discuss? Your answer should include the case of Huawei auditor's report.

(10 marks)

1. Who is responsible for preparing financial statements of Huawei? What is the external audit report on the presentation of financial statement of Huawei? Name the different financial statements that audited by external auditors. (10 marks)

1. Discuss the difference between the Audit Committee Report and Auditors Report. What is the basic information discussed in these two reports?

(10 marks)

1. Are auditors responsible for frauds? Discuss the auditor responsibility for the detection of errors and frauds? Support your answer from the Annual report of Huawei.

(10 marks)

1. Reliable accounting and financial reporting aid society in allocating resources in an efficient manner. Explain why audits are demanded by society? Support your answer from the Annual report of 2020 of Huawei?

(10 marks)

1. Write a summary on auditor's report and evaluation about Huawei performance, based on your understanding.

(10 marks)

In your answer, you should explain each point or inquire separately. Use the following headings (below) to make up the different sections of your answer:

PT3 form (Cover)	Available in LMS.
Contents	Title and contents page
TMA	Financial Reporting on the Internet (Huawei)
Reference list	Recorded according to the Harvard style - Available in LMS.