Your neighbour invited you to lunch yesterday. Sure enough, it was no “free lunch,” because he wanted to discuss the annual report of the Dodge Corporation. He owns Dodge shares and has just received the report. He says, “PricewaterhouseCoopers prepared the audited financial statements and gave an unqualified opinion, so my investment must be safe.”
What misconceptions does your neighbour seem to have about the auditor’s role with respect to Dodge Corporation?