1. What is the effect on the auditors tests of controls if the results of the walkthrough indicate that the controls have not been implemented effectively by the client?

2. During the audit, the auditor may discover deficiencies in the clients system of internal control. Some of these deficiencies may be considered significant deficiencies or material weaknesses as defined by auditing standards. Describe significant deficiencies and material weakness and the auditors responsibility for communicating them to the client. Do you consider any of the weaknesses in Oceanviews controls over acquisitions to be significant deficiencies or material weaknesses?

3. A companys management and its independent auditor have both responsibilities related to the companys system of internal control. In the context of the audit of a private company, discuss (1) managements responsibilities related to internal controls and (2) the auditors responsibilities related to internal controls?