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I do understand that the audit co may be large, but on perspective of management and s/holders, how will s/holders get assurance of mgt. (And) if audit team have to prepare financial statements, then the audit team I guess there’ll claim for more fees which will be higher than 15% as prescribed in rule book therefore high fees hence self interest.
Even in audit engagement letter it is said that the responsibilities of mgt and auditors should be clearly illustrated. Then this will conflict.
Kenneth
Why will fees be larger than 15%? The audit firm could have hundreds of clients.
You are right about respective responsibilities. It is management’s responsibility to prepare the FS or have them prepared by someone. As long as different teams from the auditors are involved the audit firm can do both provided not a public interest company.
That’s the way it is even if you think it compromises independence.
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