Evaluation and Discussion

Question 1

Part A:

An auditor has to be independent in fact and in appearance. Auditor independence is at the cornerstone of the auditing profession. You are to critically evaluate these statements and answer the following questions:

1. Why is audit independence important to an auditor? You are expected to analyze the changing landscape over the last 10 years.

2. What governs audit independence in New Zealand? You are expected to include coverage of relevant statutory and professional frameworks.

3. How can auditors safeguard themselves from threats to their independence? (25 marks)

The evaluation should be analytical and not descriptive. Support your evaluation and discussion with relevant examples and appropriate secondary information from your research.

Question 2

a) What is the difference between the posterior probability computed using Bayes formula, and the p-value of a statistical test? (5 marks)

b) According to Cohen (1994), which steps should be taken to improve statistical practice? (5 marks)

c) Random factor and fixed factor ANOVA: Consider the following experiments with two independent variables A and B.

Case 1: A is fixed (2 levels) and B is fixed (2 levels)

Case 2: A is fixed (2 levels) and B is random (levels to be chosen)

Assume that you can test a maximum of 60 participants. Describe for both case 1 and case 2 how you would distribute participants across conditions to maximize statistical power. For case 2 this requires choosing the number of levels for variable B. (5 marks)