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of the presentation of the information on the financial statement. Auditor should be unbiased, honest, justifiable and objective in order to present an accurate report. 'Besides that, auditors should consider materiality when determining the nature, timing and extent of audit procedures. (SAS220.2)' (The accountancy Foundation Limited, 1995: Online) For example, if an amount equal to or more than 10 percent of operating profit is classed as material, if an amount equal or less than 5 percent of operating profit then is regarded as immaterial, if between 5 to 10 percent, that will be depends on the circumstances of the client or audit. Materiality is also important when evaluating the effect of misstatement on the fair presentation of financial statement. Auditor should assess the materiality of the aggregate of uncorrected misstatement. 'If they conclude that the misstatement maybe material they consider reducing audit risk procedures or requesting the director to adjust financial statement.' (The Accountancy Foundation Limited, 1995: Online)

Problem of audit market is getting series recent year. In the UK, lack of competition between the largest audit firms is a big problem. Before that, the audit market concentration is used to be the Big Eight and was reduced to the Big five after the series merger s but in the recent year the Big five was reduce to big Four. The Big Four include Pricewaterhouse Coopers (PwC), Ernst& Young, Deloitte and KPMG. There have oligopolies over the audit market. There have been numerous reports and studies looking at the issue, including the Oxera Report (2006) and the Financial Reporting Council's (FRC) ongoing project. As mention before, lack of choice in the audit market is a big problem. Because of the regulations surrounding audit and non-audit work for the same client and also auditing of close competitors, some have no realistic choice of alternative auditor in the short term future. Oxera found that this lack of choice has resulted in higher prices and that due to the lack of alternatives these higher prices are able to stick and there is a lack of downward pressure on audit prices.

In United States, Enron scandal was cause by Arthur Andersen; he failed to prevent the conflict of interest over the significant consulting fees generated by Enron. Arthur Andersen issued a serious misrepresentation of the audit report and internal control evaluation report and lack independent to the Enron. Many of Enron senior management as the former employees of Arthur Andersen, the close relationship between them at least undermine the formal independence of Arthur Andersen. Besides that, of Arthur Andersen in Enron accounting has been aware of the situation but he did not take the corrective measures. The failure of Enron cause a big impact on the audit market concentration as people lost trust and confidence in the accounting industry. Besides that, Lehman brother which are the fourth largest investment bank are faced to bankruptcy. One of the reasons is because fail of external audit and supervision of accounting firm carried they work. Ernst& Young are the auditor of Lehman Brother but it turned a blind eye at Lehman brother fraud. The report shows that even after the situation is informed as true, Ernst& Young still not do objection to any question on the Lehman billions of dollars in undisclosed interim balance sheet transactions. After of Lehman Brother bankruptcy, inv