You work as a staff auditor for regional CPA firm of Cash and Green. Your supervisor asked you to conduct research for three unrelated clients. 1. In year 1, B. Cosby, CPA, conducted a review of Huxtable Company's financial statements. However, in year 2, the Huxtable Company hired your fim, Cash and Green, to audit its financial statements. Should your firm meet with B. Cosby, and would B. Cosby be considered as a predecessor auditor? 2. In audit of the G. Lopez Co's financial statement, your firm seeks to obtain an attorney representation letter regarding any, undisclosed potential corporate liabilities. Angie L., the G. Lopez General Council responded to this letter by citing American Bar Association (ABA) language that emphasizes attorney-client privilege regarding such unasserted claims. E.g., the letter uses such phrases as "it would be inappropriate for this firm to respond to such general inquiries" and "we cannot comment upon the adequacy of the company's listing, if any, of unasserted possible claims or assessments." Do such responses constitute limitations in the scope of the audit? 3. Your firm issued an unqualified audit opinion for the B. Mac Inc.'s previous year's financial statements, which used a modified accrual basis of accounting, which is considered as an other comprehensive base of accounting (OCBOA). In the current year, B. Mac switched to (normal, full) accrual system, and wants to show comparative financial statements for the two years. Should your firm require the restatement of the prior year's financial statements using this new basis of accounting, and what disclosures, if any, should be made to the financial statements and Joe's audit report? 4. Your firm is completing the audit of the Ima Big Company's current year's financial statements and reads in SAS 114 (AU Section 380) that he should communicate his results with members of Ima's audit committee. But, despite many requests for many years, Ima has established no such committee-primarily since it has only two stockholders. What should your firm do now? Required: a) Provide responses for each independent case on the appropriate accounting treatment. b) Support your responses by citing the appropriate Statement on Auditing Standard (SAS) or AU Section.