Audit Responsibilities and required Audit Standard for accepting a new client:

Deanza, CPA, accepted an engagement to audit the financial statements of Foothill Co., a new client. Foothill is a publicly held retailing entity that recently replaced its operating management. In the course of applying audit procedures, Deanza discovered that Foothill's financial statements may be materially misstated due to the existence of fraud. Required:

(a) Describe Deanza's responsibilities on the circumstances described above.

(b) Describe Deanza's responsibilities for reporting on Foothill's financial statements and other communications if Deanza is precluded from applying necessary procedures in searching for frauds.

(c) Describe Deanza's responsibilities for reporting on Foothill's financial statements and other communications if Deanza concludes that Foothill's financial statements are materially affected by frauds.