in the modern commercial world auditors provide numerous other services to complemen 1572363

In the modern commercial world, auditors provide numerous other services to complement their audit work. These services include the following:

(a) Accountancy and book-keeping assistance, e.g. in the maintenance of ledgers and in the preparation of monthly and annual accounts.

(b) Secretarial help, e.g. ensuring that the company has complied with the Companies Act in the maintenance of shareholder registers and in the completion of annual returns to Companies House.

(c) Consultancy services, e.g. advice on the design of information systems and organisational structures, advice on the choice of computer equipment and software packages, and advice on the recruitment of new executives.

(d) Investigation work, e.g. appraisals of companies that might be taken over.

(e) Receivership work, e.g. when the firm assumes the role of receiver or liquidator on behalf of an audit client.

(f) Taxation work, e.g. tax planning advice and preparation of tax returns to the Inland Revenue for both the company and the company’s senior management.

Discuss:

(i) Whether any of these activities is unacceptable as a separate activity because it might weaken an auditor’s independence.

(ii) The advantages and disadvantages to the shareholders of the audit firm providing this range of service.