4. Criticize management for failing to establish appropriate goals and objectives Problem 15-1 The Yellow Book standards relating to financial audits apply to independent CPA firms as well as government audit departments. The following descriptions relate to an independent CPA firm that includes among its audit clients municipalities, school districts, and not-for-profit organizations, all of which receive federal financial assistance. Each description presents a possible violation of Government Auditing Standards. For each description, indicate the standard at issue and tell why there might be a violation. 1. Each year the managing partner appoints a committee of three of its partners to evaluate the quality of the work performed by the firm. The firm is not otherwise reviewed by independent parties. 2. When the firm conducts a financial examination, its primary objective is to determine whether the auditee's financial system is properly designed, the system is operating as intended, and the resultant financial records can be relied on. Accordingly, the department does not test explicitly for fraud or other illegal activities. 3. The firm has a formal program of continuing professional education. To eliminate the need to pay for the staff to attend outside courses, it brings in outside experts to conduct 40 hours per year of training. Each year the training is directed to a specific area. This year's area was changes in the federal tax code; last year's was "how to market the firm." 4. The firm periodically assigns members of its staff on a temporary basis to government and not-for-profit audit clients. The staff members typically serve as financial consultants or as acting financial administrators