Smith, the owner of a small company, engaged Holmes, a CPA, to perform a financial statement audit. Smith told Holmes that an audit was to be completed in time to submit audited financial statements to a bank as part of a loan application. Holmes immediately accepted the engagement and agreed to provide an auditor's report within three weeks. Smith agreed to pay Holmes a fixed fee plus a bonus if the loan was granted.

Holmes hired two accounting students to perform the audit and spent several hours telling them exactly what to do. Holmes told the students not to spend time reviewing the controls, but instead to concentrate on proving the mathematical accuracy of the accounts and summarizing the data in accounting records that support Smith's financial statements. The students followed Holmes' instructions and after two weeks gave Holmes the financial statements, which did not include footnotes. Holmes reviewed the statements and prepared an unqualified auditor's report. The report, however, did not refer to generally accepted accounting principles.

Required: 

Briefly describe each of the generally accepted auditing standards and indicate how Holmes' actions resulted in a failure to comply with each standard. Organize your answer as follows: