1. a) Four friends who are auditing students have a discussion. Evans says that the primary responsibility for the adequacy of disclosure in the financial statements and footnotes rests with the auditor in charge of the audit field work. Mercy says that the partner in charge of the engagement has the primary responsibility. Abdul says the staff person who drafts the statements and footnotes has the primary responsibility. Peter contends that it is the clients responsibility.

Required:

Which student is correct and why?

b) For each of the following situations involving relations between auditors and the companies they audit, indicate whether it violates IFACs Code of Ethics for Professional Accountants and the rationale for the applicable guideline.

i) Paul Asante, CPA, discloses confidential information in a peer review of the firms quality control procedures.

ii) Frank Smith, CPA, is auditing a company in Ghana, which has offered to send him and his wife on a holiday in Hawaii for two weeks.

iii) Tabula Gonzales, CPA, says in an interview in the local paper that Emilio Rios, CPA, misleads his clients about the quality of his audit work.

Instruction: Give detailed explanations and Add references