Audit standards require that several levels of review occur. The senior accountants' review is required to ensure that the staff has performed the required audit procedures and that findings and conclusions are well documented. Managers and partners review at a higher level. Their intent is to ensure that GAAS has been applied and met, that conclusions are appropriate and that the working papers all tie together and no open items exist. A second partner is required to ensure that the quality control process has been met and to provide another opinion on the application and meeting of GAAS requirements. This is an area that is often focused on when litigation occurs against an audit firm.

EKH Industries was audited by BK&D CPAs. Four different individuals performed reviews of the working papers: Sarah A. Concurring partner), Emily R. (Partner), Laura B. (Manager), and Joe J. (Senior Associate), Emily's review comments included inconsistent amounts between working papers for the same accounts; for example, the gain on the sale of assets did not match between the property working papers and the cash flow support. Laura's comments indicated inconsistent trends--some working papers talked about rising labor costs, while others discussed layoffs of plant personnel. Joe documented that cutoff was not properly tested for cash accounts and that accounts receivable testing was missing a conclusion. Sarah indicated that signoffs were not appropriate, the working papers were not dated appropriately, and the drafts had been issued too early.

Please answer the following:

1. Does it appear that the engagement team had the appropriate personnel reviewing work papers based on the Audit Standards listed above?
2. Why is the documentation, conclusion, and accumulation of audit evidence important for the auditor to maintain?