FAIL I ALLOIL Flailing I _ _ POLLIES ) On September 3 , 20*^1 , Larkin , CPA , was engaged to audit the financial statements of Modern Minerals Co. ( MM ) , for the year ended October 31 , 20 *1 . MM purchases precious metals at wholesale prices and resells them to craft clubs at retail . MINT is a new client whose Columnon stock was first offered to the public five years ago . MM received an unqualified opinion on its financial statements in each of the prior three years , but changes auditors after each engagement . I'll accepting the engagement , Larkin completed all of the appropriate client acceptance* procedures . Larkin instructed Johnson , an assistant on the engagement , to draft a planning checklist that would assist Larkin in preparing the audit staff for the field work that is scheduled to begin on October 17 , 20 * 1 . On October 5 , 20 *^1 , Johnson prepared the planning checklist below ( engagement letter points have been omitted ) . Indicate the inappropriate points that are included on Johnson's planning checklist . ( Hint : Only 1 - 3 points are inappropriate in each section ! 1 . Understanding the assignment* In planning the audit , have the engagement personnel considered Inappropriate 1 . MM's accounting policies and procedures ? J 2 . Financial statement items likely to require adjustment ? 3 . The effects of accounting and auditing pronouncements , particularly new ones ? 4 . Methods of audit sampling to be used ? 5 . Whether the method of sampling is likely to be approved by MM ?! 6 . The extent of involvement of other independent auditors or internal auditors ?" TO L ! J 7 . Procedures to evaluate competence and objectivity of MM's internal auditors