Case Study Galaxy is a newly organized CPA firm located in Manama, The CPA firm is engaged to perform auditing of historical financial Moments to vrlo low In doing , CPA or Galaxy have to comply with applicable auditing standards in many respects in their and engagement. The standards and the underling principles provide a framework to help anditors fulfill their professional responsibilities. Additionally, CPAs are required to follow the Code of Professional Conduct to conduct themselves at a higher level of professionalism. Professional accounting and auditing bodies are empowered to such Ruditing standards and rules as general guidelines to aid auditors in fulfilling their professional responsibilities in the audit of historical financial statements. Among these professional organizations are the Public Company Accounting Oversight Beard (PCAOB) and the American Institute of Certified Public Accountants (AICPA). However, CPAs of Galaxy have certain duties and responsibilities that allow to gain diversity of experience across client cogagements. Because of advances in computer and audit technology, CPAS has the opportunity to be given greater responsibility and challenges Accordingly, they can be promoted rapidly through the hierarchical levels of the firm. Based on your auditing background, you are required to help the CPAs in analyzing each of the following separate individual cases related to audit engagements of historical financial statements by answering the following questions. in which type of threat to compliance with the rules of the AICPA's Code of Professional Conduct that a member will secure rotinacat help from an art client relation, promicated with the dent being affected by the outcome of the attest engagement A Management participation O Sentral C. Familiarity OD Undue influence 55 Questions poin Which of the following statements is not true about audit firms, CPAs, and audit clients O A Threats to independence may cause the CPC permit misstatements to enhance personal wealth in any audit engagement B. Knowledge gained by an audit firm about a client's business is essential to evaluate misstatements in the financial statements but the CPA may become complacent due to familiarity OC. Some clients find at loss expensive to have bookkeeping services performed by a CPA because the auditor of public companies will ready be knowledgeable about the business, OD. It is costly for a new audit firm to obtain knowledge about a client's business because of contidentiality requirements and communication difficulties between CPA. stion 4 points atera and Farida are sisters, Fatema is a CPA auditing a dient's organization where Farida works. Fatema's independence is not impared in which of the of the following circumstances O A Farida is a sales staff of the client organization B Farida is a nominal director of the client organization C. Farida owns 13% of the client organization D. All of the above