Problem: In their review of the public accounting profession, Lou Harris and Associates warn that an audit report too often is viewed as a "certificate of health" for a company: The report states:
The most serious consequences stemming from such a misunderstanding are that the independent auditor can quickly be portrayed as the force that represents all good in financial accounting and the guarantor of anything positive anyone wants to feel about a given company.
1. Why is public accounting often viewed as a guarantor of results or even as a provider of assurance that one's investment is of high quality?
2. To what extent is it reasonable to view the auditor as a guarantor? Explain.
3. How does the auditing profession work to create or communicate a reasonable set of expectations that users should hold?
4. To what extent do you believe that user expectations of the public accounting profession appear to you to be unwarranted? Explain.