1) Identify audit tests that may be used as alternative audit procedures when a response is not received for a positive confirmation request. Compare and contrast the quality of audit evidence yielded by these procedures with that produced by audit confirmation procedures.

2) Is it appropriate for audit firms to sharply discount their professional fees for development stage companies? Why or why not? What problems, if any, may this practice pose for audit firms?

3) Should audit firms accept ethically challenged companies and organizations as audit clients? Defend your answer.