Base on this auditing case, please list at least three substance question as an auditor perceptive?(what questions do you have if you are an auditor)

The Audit of ABC

Background

ABC Shoes (ABC), a company that is publicly traded on the New York Stock Exchange, manufactures and distributes high-performance athletic footwear and apparel. Established in Philadelphia in 2000 as a small, family-owned business, ABC has expanded to include a wholly owned subsidiary, ABC's Shoes LLC. ABC's corporate management is based in Philadelphia, and the manufacturing and distribution plants are located in Houston and Los Angeles.

You have been hired as ABC's external auditor and have been assigned to test ABC's related parties and its relationships and transactions with related parties in accordance with PCAOB AS 2410.

You have spoken with ABC's CEO, Dain Blanton, who believes that the processes and controls in place at ABC would result in the identification of any related-party relationship that would require further investigation or possible disclosure in the financial statements. Further, he has stated that the company does not have any related party events or transactions that would need to be disclosed in the current-year annual financial statements in accordance with ASC 850

See the appendix below for ABC's organizational structure.

Management's Processes and Controls

To understand management's processes and controls over related parties and its relationships and transactions with them, you obtain ABC's relevant process flow narrative from management, which states the following:

Before hiring a new employee, the human resources manager performs a background check. Employees hired for management positions must disclose their significant ownership interests. ABC's legal department maintains a listing of these disclosures ("related-parties listing") and periodically checks the disclosed relationships against ABC's vendor and customer master file. Annually, before ABC files its Form 10-K, management signs representations indicating that to the best of its knowledge, ABC did not enter into any relatedparty transactions that were not disclosed in the financial statements. Management also discloses any changes in its significant equity ownership or investments at this time. A review of the representations is performed by the legal department, the related-parties listing is updated for any new related parties identified, and the records are maintained in a locked room.

Risks of Material Misstatement As a result of the risk-assessment procedures performed, you have determined that the risks of material misstatement listed below apply to the audit of ABC. You have also determined that none of the identified and assessed risks of material misstatement are Page 2 significant risks. (Note that there are additional risks of material misstatement regarding related parties and relationships and transactions with related parties; however, this case study only focuses on the risks outlined below.)

As a result of the risk-assessment procedures performed, you have determined that the risks of material misstatement listed below apply to the audit of ABC. You have also determined that none of the identified and assessed risks of material misstatement are Page 2 significant risks. (Note that there are additional risks of material misstatement regarding related parties and relationships and transactions with related parties; however, this case study only focuses on the risks outlined below.)

R_RP_1: Related parties and transactions with related parties may not be appropriately identified.

R_RP_2: Related-party transactions are not recorded in accordance with applicable accounting standards.

R_RP_3: Related-party transactions are recorded:

-For transactions that did not occur or are pending.

At incorrect amounts.

In the incorrect period.

R_RP_4: Related-party transactions are recorded:

For transactions that lack a business purpose.

Without taking into account the counterparty's financial capability.

R_RP_5: The related-party disclosure includes transactions that:

May not have occurred.

Lack a business purpose.

Are not recorded on terms equivalent to those prevailing in an arm's length transaction and are not disclosed as such.

R_RP_6: The related-party disclosure does not sufficiently describe related-party transactions in accordance with the applicable financial reporting framework.