1. How does the auditor’s assessment of the risk of financial statement misstatement affect the work that must be performed in an audit of internal control over financial reporting? 2. In the...

1. How does the auditor’s assessment of the risk of financial statement misstatement affect the work that must be performed in an audit of internal control over financial reporting?

2. In the aftermath of a series of high-profile business scandal, efforts were made to enhance corporate governance and risk management with the establishment of new regulations. In the US, the Sarbanes Oxley Act of 2002 and the establishment of PCAOB address the essential issues on internal control reporting and the auditor’s role in this respect. Discuss these changes along with how the proposed measures could be effective in bolstering confidence in capital market economies.