Auditing, a dynamic assurance model, has played an essential role in the economic environment in the last few decades. Specifically, it increases the credibility of professional accounting and ensures market integrity. Auditors prove that a company's financial records and accounting procedures comply with the regulation by reviewing financial statements and records. In the early 2000s, there were some major corporate collapses and audit failures, which have threatened the credibility of the audit function such as the collapse of Enrol followed by the fraud in WorldCom and collapse of Arthur Anderson or the collapse of HIH insurance in Australia. Hence, acquiring more knowledge about the recent changes in the audit and financial reporting environment is very important (Leung, Coram, Cooper & Richardson, 2015, pp. 4-43). 1. Introduction …show more content…
Through gathering this information, the researcher will be able to give recommendation on what items in the financial report would auditors be paying attention to provide users with a view that the financial reports represents a “true and fair” view of the economic performance of Carla’s Coffee. 1.1 Purpose of the report This report was commissioned by the investors. The purpose of the report is to indicate the reason why company demand an audit. The researcher plays a role as the auditor who have to recommend what items in the financial report I would focus on. In addition, if it was the dozen potential investors who had engaged me to undertake the audit, I would pay attention to what items. The predictable risk of Carla’s Coffee is also reviewed in order to make a suggestion to the company. 1.2