94% Fri 1:09 indow Help Identifying and Evaluating Audit Issues - The Case of Vitalogistics-Sv.pdf (page 5 of 6) Q Search had the celebration started than Andy Card, the engagement partner, walked in and gave them the news that VITALOGISTICS's revenue for 20X4 was misstated by $85 million (arising from revenue booked on consignment sales). Andy discovered this problem from the Director of Internal Audit and confirmed the existence and magnitude of the misstate- ment from the Controller. REQUIREMENTS In addressing the questions below, consult the relevant professional standards of audit- ing and financial reporting. Unless specifically mentioned, assume that standard required audit procedures were completed. Your instructor will identify the requirements you are assigned to complete. Client Acceptance 1. Did KPVI's client-acceptance process follow the applicable standards and regulations? Evaluate the engagement letter in light of the decision in the 1136 Tenants' case (1736 Tenants' Corp. v. Max Rothenberg & Co., 36 A.D.2d 804, N.Y. App. Div. 1971). 2. Identify and discuss the pressures faced by Andy Card, the audit partner. How might those pressures affect the decision to accept the client and the performance of the audit? 3. Ace Fritz, an audit manager in the office, was left off the audit team because he owned 5,000 shares of VITALOGISTICS stock. IKPVI required to disqualify Ace? How does the analysis change if you assume Ace was (a) a partner? (b) an associate? Planning Phase 4. At the team planning meeting in February 20X4, the audit team set overall audit risk at moderate and concluded that detailed testing of all significant balances was still necessary. Identify and evaluate the factors relevant to these decisions. Explain why you agree or disagree with the decisions made, Interim Work 94% Fri 1:09 indow Help Identifying and Evaluating Audit Issues - The Case of Vitalogistics-Sv.pdf (page 5 of 6) Q Search had the celebration started than Andy Card, the engagement partner, walked in and gave them the news that VITALOGISTICS's revenue for 20X4 was misstated by $85 million (arising from revenue booked on consignment sales). Andy discovered this problem from the Director of Internal Audit and confirmed the existence and magnitude of the misstate- ment from the Controller. REQUIREMENTS In addressing the questions below, consult the relevant professional standards of audit- ing and financial reporting. Unless specifically mentioned, assume that standard required audit procedures were completed. Your instructor will identify the requirements you are assigned to complete. Client Acceptance 1. Did KPVI's client-acceptance process follow the applicable standards and regulations? Evaluate the engagement letter in light of the decision in the 1136 Tenants' case (1736 Tenants' Corp. v. Max Rothenberg & Co., 36 A.D.2d 804, N.Y. App. Div. 1971). 2. Identify and discuss the pressures faced by Andy Card, the audit partner. How might those pressures affect the decision to accept the client and the performance of the audit? 3. Ace Fritz, an audit manager in the office, was left off the audit team because he owned 5,000 shares of VITALOGISTICS stock. IKPVI required to disqualify Ace? How does the analysis change if you assume Ace was (a) a partner? (b) an associate? Planning Phase 4. At the team planning meeting in February 20X4, the audit team set overall audit risk at moderate and concluded that detailed testing of all significant balances was still necessary. Identify and evaluate the factors relevant to these decisions. Explain why you agree or disagree with the decisions made, Interim Work