Education need to improve availability of programs

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2. Education: Need to improve availability of programs for exceptional children. 3. Young offenders: Suggested improved documentation before releasing young offenders. Blooms Taxonomy: Knowledge recall Difficulty: 2 Learning Objective: 1.5 Page Reference: 16 Smieliauskas - Chapter 01 #37
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38. Discuss the conflict between the need for an audit firm to perform quality services and its desire to make a profit in the context of the investor's need for reliable information. An audit firm needs to be able to pay its staff in line with their abilities. Otherwise, more qualified staff will seek opportunities elsewhere. If they leave, only less qualified people will remain which will reduce the quality of audit possible. With less qualified people, the audit firm may be unable to express the correct opinion on the fairness of the financial statements. This would tend to increase investor's information risk. One way to have more money to pay staff appropriately is to reduce the amount of time spent on each assignment. More assignments each with less time spent would permit more profit on each assignment. However, reducing the amount of time spent on each audit engagement would also increase the risk that a material error was missed in the audit. This increases the information risk to investors which decreases the value of the audit to them and increases the likelihood that they will sue the auditors to recover any investment losses. A constant demand by investors for reduction in information risk means that except in the short term, an auditor cannot reduce the quality of its services. By the same token, there is an equilibrium level of profit for audit firms, and compensation for its staff and partners which investors are willing to provide in exchange for their desired reduction in information risk. Blooms Taxonomy: Comprehension Difficulty: 3 Learning Objective: 1.6 Page Reference: 18 Smieliauskas - Chapter 01 #38
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1 Summary Category # of Questions Blooms Taxonomy: Application 1 Blooms Taxonomy: Comprehension 13 Blooms Taxonomy: Knowledge recall 24 Difficulty: 1 20 Difficulty: 2 17 Difficulty: 3 1 Learning Objective: 1.1 4 Learning Objective: 1.2 8 Learning Objective: 1.3 5 Learning Objective: 1.4 7 Learning Objective: 1.5 8 Learning Objective: 1.6 4 Learning Objective: 1.7 2 Page Reference: 11 3 Page Reference: 12 3 Page Reference: 13 4 Page Reference: 14 3 Page Reference: 15 1 Page Reference: 16 4 Page Reference: 17 1 Page Reference: 18 1 Page Reference: 19 1 Page Reference: 22 1 Page Reference: 23 1 Page Reference: 24 1 Page Reference: 3 2 Page Reference: 4 2 Page Reference: 5 4 Page Reference: 6 3 Page Reference: 7 1 Page Reference: 8 1 Page Reference: 9 1 Smieliauskas - Chapter 01 38
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