ACC 411 Project One Audit Team Due Diligence Professional Care Checklist Template

Directions

Assess your audit team to ensure the team is qualified to perform the audit. Once your checklist is complete, you will communicate any findings from this assignment within the Client Risk Profile Template. Consult the PCAOB Auditing Standards AS1005, AS1010, and AS1015 for guidance. Complete this template by replacing the bracketed text with the relevant information.

Scenario

For whatever company you choose to analyze, assume you are the audit partner responsible for assigning staff to work on that audit. Review the following facts and then assess if any of the information raises potential red flags that might impair objectivity and independence if you assigned that person to the audit. Document your analysis in the categories below including what action should be taken.

Staff

Robert Woods is an audit senior and a CPA. Robert is also on the board of directors of several charities, where he interacts with some of the businesspeople in the area. One of the people he routinely works with is the CFO of the company you are going to audit. In addition, the CFO used to work for your audit firm within the audit practice before leaving to work for your potential client.

Alma Sanchez is targeted to be the audit manager on the engagement. Her husband, Tyr, while not directly working with the company you are going to audit, holds a majority stake in that company. The firms policy is that any person working on the engagement cannot have a direct investment, of any size, in any audit client of the firm. Further, the person cannot have a material indirect investment in the audit client.

Rancel Dumari is targeted to be the lead auditor on the engagement but has only worked on small, nonprofit clients. The audit of this client requires extensive specialized knowledge of chemical manufacturing. No other team members understand the industry and its unique accounting standards and regulations.

Technical competency

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Independence (lack of bias)

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Professional skepticism

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