Each of the following situations Involves a possible Violation of the requirements of the provincial institutes' Rules of Professional Conduct . 1 . Sebastian, CPA, is the auditor of MISE Inc. , a small private property* management client that manages one retail property . In planning and performing his audit , Sebastian decided that he would not establish an understanding of internal controls , nor would he test the effectiveness of controls . In order to perform the audit at minimum cost to the client , he relied on analytical procedures and substantive tests of transactions and details to conduct the audit . 12 marks ) 2. John , CPA , completed an audit of the financial statements of his client , PIC Litd . During his examination he was unable to obtain sufficient appropriate* Evidence concerning the collectability of a material portion of the company's accounts receivable balances . As a result , he issued an adverse opinion on the Financial statements . ( 2 marks ) 3. Irene , CPA, provides various services for Simply Fashion Inc. , a privately* held company . She completes all of Simply Fashion Inc . 's tax work , including* preparing the annual corporate tax filing and performing tax consulting Services . Recently Simply Fashion Inc . began negotiations for a new bank loan , and a condition of the loan is that Simply Fashion must provide the bank with audited financial statements on an annual basis . Simply Fashion has asked Irene to complete the annual audit and to continue to perform the tax services she already performs . Irene accepted the Engagement , and in* order to improve audit efficiency , she has assigned the team that completes the tax work to the financial statement audit . ( 2 marks)