1. Discuss the actions an auditor should take when the auditor dis A illegal act. a. What would be the auditor's first three (3) considerations? b. If the client does not deal with the illegal act in a satisfactory manner, what would be the appropriate action by the auditor? c. Also, if the client is publicly held, what would be the auditor's additional responsibility? 2.Required: Shire Antiser List four (4) general descriptions of the kinds of accounting and reporting manipulations that are most likely to produce materially misleading financial statements. 3.. Banks are specifically interested in accounts receivable and inventory as these are collateral for a commercial loan. Assuming that you are the auditor of a client with a bank loan. The client has total assets of $1,815,000, and the combined accounts receivable and inventory represents 49% of total assets. Requirement: Recommend a related specific performance materiality as a percentage of the composition of accounts receivable and inventories. 4.Requirements: 1. Biefly discuss what a pervasive misstatement means, 2. How will a pervasive misstatment impact the auditor's rendition of opinion and issuance of the audit report? 5.Scope limitations affect the ability of an auditor to render a clean opinion on the financial statements of a client. Requirement: Provide three (3) examples of events that will cause a scope limitation. 6. In the audit of financial statements, why are contingent liabilities difficult to identify?