1. You are an audit supervisor assigned to a new client, Go-Go Corporation, which is listed on the New York Stock Exchange. You visited Go-Go's corporate headquarters to become acquainted with key personnel and to conduct a preliminary review of the company's accounting policies, controls, and systems. During this visit, the following events occurred: a. You met with Go-Go's audit committee, which consists of the corporate controller, treasurer, financial vice president, and budget director. b. You recognized the treasurer as a former aide to Ernie Eggers, who was convicted of fraud several years ago. c. Management explained its plans to change accounting methods for depreciation from the accelerated to the straight-line method. Management implied that if your firm does not concur with this change. Go-Go will employ other auditors. d. You learned that the financial vice president manages a staff of five internal auditors. e. You noted that all management authority seems to reside with three brothers, who serve as chief executive officer, president, and financial vice president. h. You reviewed the company's policy and procedures manual, which listed policies for dealing with customers, vendors, and employees. k. After a careful review of the budget for data security enhancement projects, you feel the budget appears to be adequate. k. After a careful review of the budget for data security enhancement projects, you feel the budget appears to be adequate. o. You observe that company purchasing agents wear clothing and exhibit other paraphernalia from major vendors. The purchasing department manager proudly displays a picture of himself holding a big fish on the deck of a luxury fishing boat that has the logo of a major Go-Go vendor painted on its wheelhouse. Required The information you have obtained suggests potential problems relating to Go-Go's control environment. Identify the problems and explain them in relation to the control environment concepts discussed in this chapter