Ann Donnelly is a senior audit manager in a Toronto office of a public accounting firm. Her prospects for promotion to partner are excellent if she continues to perform at the same high-quality level as in the past. Ann was recently married, and she and her husband bought a large home in a prestigious neighbourhood. Ann just returned from a vacation and was immediately called into an audit partner’s office for a discussion related to one of her publicly traded audit clients. This audit engagement, which had been completed with an audit report issued several months prior, had been selected for a CPAB inspection and the partner is concerned. CPAB inspections can be stressful for the primary engagement partner and often result in the identification of audit deficiencies by the CPAB, which are then discussed with the audit firm. The partner is concerned he will look bad and may even face penalties from the firm if there are serious deficiencies identified. In the current meeting between Ann and the partner on the audit engagement, they feel they need to provide further support for one of the judgmental audit areas on the audit engagement in order to avoid scrutiny from the CPAB, and that they also need to go through the working papers and ensure that all work was appropriately signed off by the manager and partner. The partner suggests to Ann that she include an additional memo to support their conclusion on the judgmental audit area in question, that she date this memo as if she had completed it at the time she and the staff originally did the work, and that she ensure all required signatures are in the working papers. Ann reminds the partner this is in violation of CAS 230 and the firm’s quality control standards; however, the partner assures Ann that no one will know and they can avoid possible penalties that would result if they do not ensure that their audit engagement will pass inspection. “After all,” the engagement partner reminds Ann, “you will soon be considered for promotion to partner, and you would not want a negative inspection outcome on a prior engagement to stand in your way of making partner.”

REQUIRED
a. Refer to CAS 230 A.1, A.21, and A.22 and explain what the standard says about the requirement to complete a file.  can be added after the documentation completion date?
b. Refer to the ethical decision-making framework in Chapter 4 and recommend what Anne should do.