The correct answers are: Auditors must prepare a report for the shareholders on the truth and fairness of the financial statements; When auditors cease to hold office as auditors for any reason, they must make a 'statement of circumstances' stating whether anything needs to be brought to the attention of members or creditors in relation to their ceasing to hold office.

Auditors are not responsible for the preparation of financial statements or the effective operation of accounting and internal control systems, directors are. Auditors do not owe a statutory duty of care to creditors, although the courts may hold that a duty of care is owed, particularly to shareholders. The 'statement of circumstances' is required by law.