1. 1. List three types of consulting services that audit firms have provided to their audit clients in recent years.

For each item, indicate the specific threats, if any, that the provision of the given service can pose for an audit firm's independence. Audit firms have provided the services of auditing, reviewing of financial statements and agreed-upon agreements to their clients. 2. Briefly describe the key requirements included in the professional auditing standards regarding the preparation and retention of audit work papers. Which party owns the audit work papers: the client or the audit firm? Basically, it is the client's responsibility to provide sufficient information and documents in order for an auditor to perform audit. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of financial statement. Also, they are responsible for the provision of unrestricted access to all information and records relevant to such statements. 3. Identify and list five recommendations that have been made recently to strengthen the independent audit function. For each of these recommendations, indicate why you support or do not support the given measure. 4. The ENRON debacle created what one public official reported was a crisis of confidenceon the part of the public in the accounting profession. List the parties whom you believe are the most responsible for that crisis. Briefly justify each of your choices. The first party responsible would be the clients for audit services. Inevitably, there are managements who produce unreliable financial statements and insufficient documents. As a result, auditors cannot completely audit the assertions and produce a relevant result to users. There's a big risk for their names being used to enhance the credibility of their client's financial statements. Also, the auditors themselves are responsible for this crisis. They lack in evaluating their client's background and practicing proper procedures. Nowadays, there are auditors who would agree to connive with the client in order to present a much better figures in the financial statements to their users in exchange of additional payment. 5.