1. Following recent financial failures, there has been more and more institutional involvement in the market economy with respect to audit function, including the regulation of the audit profession....

1. Following recent financial failures, there has been more and more institutional involvement in the market economy with respect to audit function, including the regulation of the audit profession. How do you evaluate this intervention? Do you believe that the auditing profession is unable to regulate itself?

2. Discuss the bubble economy, particularly the way it leads management to adopt increasingly creative and sophisticated accounting practices to produce robust earnings. In your opinion, how does earnings quality affect audit quality?