1-2 Assurance service usually provided by Certified Public Accountants with the goal of improving and checking financial

document, transaction, loan, bill. Independent is an important thing for accountant to full fill these services. There are two types of assurance services 1-4 A large corporation with securities listed on a stock exchange must abide by the rules of the Securities and Exchange Commission and the stock exchange to support audits report and financial statement. Addition, auditors could be asked for internal control. Finally, many customers need the report of auditors because of increasing the reliability for financial statement. A small family- owned enterprise need auditors report to raise credibility in its profile for bank loan. 1-5 Business situations that need a report by an independent public accountant: Annual report to General Directorate of taxes. Join in likes IPO (Initial Public Offering) Profile for bank loan Reporting to the Securities and Exchange Commission Increasing the reliability of information Involve putting Information in a form or context that facilitates decision making

1-11 The independent status must be apart of internal auditors because they review all work of other departments. But internal auditors are employees of one company. So that, the degree of independence of internal auditors is smaller than public accounting firm that has many

customers. The public accounting firm is not a department of one company as internal auditors and has more customers than internal auditors who sever only their company. 1-12 The internal auditors Employees of Spacecraft, Inc.. The public accounting firm Independent of Spacecraft, Inc..

evaluate and improve the effectiveness of risk Concerned with determining the fairness of management, processes control, and governance financial statement

1-23 The international auditing and assurance standard board is a committee of the international federation of accounts, established to develop guidance to improve the standards of accountancy education around the world. Its pronouncements involve: International Standards on Auditing(ISAs) International Standards on Quality Control( ISQC) Other standards for assurance

The purpose of them is focusing on the grow of worldwide professional standards. These pronouncements establish standards that do not override a member nations auditing standards. 1-25 a. Facilitating the transaction is important for independent audits. It is clear that auditing can significantly affect the level of information risk .They can help to improve information risk that affect making decision of investors . b. If the corporation decides not to obtain independent audits of its financial statements, the risk of information will be high. Why? Because the credibility gap does not fill. It lead that the investor does not want this bonds or they invest it with a higher rate of return. 1-27 a. An example is that the company want to reduce the tax that must be paid for General Directorate of taxes. So that, they want to decrease the Net Income by increasing the cost of goods sold, minimize total sales( following the traditional format). b. In this situation, General Directorate of taxes must require the audited financial statement or use the State Audit to check the information. Data must be exact to calculate accurate tax.