1. What factors does a loan officer take into account when granting a loan to a company?
2. Among the different types of audit reports, which one should most influence loan officers?
3. In your opinion, why are the external auditor’s opinion and judgement not sufficient in evaluating the financial prospects of a company seeking a loan from a commercial bank?
4. Discuss the characteristics of ‘event studies’ in auditing research. Describe the test of Efficient Market Hypothesis (EMH) in this area.
5. Discuss the relationship between the efficiency of the capital market and the quality of
financial information and financial statements.
