Discussion Questions -
1) Based on the definition of auditing and the four generally accepted reporting standards (Table 2-3) as well as the text discussion of these items, do you think users of financial statements should expect those statements to be free of errors and fraud? Do auditors make this guarantee when they provide the firm with a "clean opinion?" Answer in your own words and defend your position.
2) GAAS standards emphasize the critical importance of auditor independence and objectivity, as does the definition of auditing. Do you believe that auditors can be sufficiently independent and objective when the auditee is also a client and is paying the auditor's fees? Why or why not? Answer in your own words and defend your position.
3) The text discussion several legal forms of organization - proprietorship, general partnership, general corporation, professional corporation, limited liability company, and limited liability partnership. Should states limit the form of organization that CPA firms can use and why? If so, which forms should be prohibited and why? Answer in your own words and defend you choices.