Question 2

A. Discuss why there is a need for auditing servuces in a free market economy and how does this relate to the principal-agent relationship between owners and managers

B. The responsibility of ensuring proper accounting and auditing systems is not just the responsibilities of the accounting profession alone but also the corporate players; directors and management of the conpanies play a significant role in ensuring a sound system of financial reporting is present to safeguard public interest

REQUIRED:

(a) Explain and distinguish between directors' responsibility for the company's financial statements abd auditor's responsibility for the financial statements

(b) state TWO (2) main reporting responsibilities of an auditor under the Companies Act 1965