1. What are the characteristics of the rules adopted in the EU environment governing auditor independence? Discuss this question with reference to (a) the Sarbanes-Oxley Act of 2002 and (b) the SEC...

1. What are the characteristics of the rules adopted in the EU environment governing auditor independence? Discuss this question with reference to (a) the Sarbanes-Oxley Act of 2002 and (b) the SEC Final Rules of 2003.

2. ‘The relationship of “management-auditor-shareholder” is potentially conflicting and in today’s society the independence of auditors is considered a major issue. In addition to the problems associated with this relationship, auditors are themselves acting as economic agents who maximize their utilities. Therefore it is rather difficult to provide a fair and independent judgement on the company’s financial performance and on its directors.’ Discuss this statement with regard to auditor independence in the context of agency relationships. What are the theoretical grounds for having reliable reporting by auditors?