For each of the following independent situations, state whether the CGA has violated generally accepted auditing standards and/or the CGA-Canada Code of Ethical Principles and Rules of Conduct or Independence Standard and explain your reasoning. a. Sebastian, CGA, is the auditor of MSC 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. (2 marks) b. John, CGA, completed an audit of the financial statements of his client, PTC Ltd. During his examination he was unable to obtain sufficient appropriate evidence concerning the collectability of a material portion of the companys accounts receivable balances. As a result, he issued an adverse opinion on the financial statements. (2 marks) c. Irene, CGA, 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) d. John, CGA, has compiled the financial statements of Mixing Cakes Ltd. for many years. His wife is the vice president of marketing for the company and is not directly involved in financial matters. Each year, John issues the standard notice to reader report required for compilations, which does not include disclosure of his lack of independence. (2 marks) e. Theresa, CGA, runs an advertisement in a local newspaper listing specific services that she performs and her rate for performing each type of service, some of which are available for a fixed fee. (2 marks) f. Anna, CGA, is a sole practitioner who shares office space with Sarah, CGA. In a casual conversation, Sarah admits that she has knowingly given unmodified opinions on several fraudulently prepared financial statements. Anna therefore informs the provincial and national CGA associations. Prior to informing the associations, Anna notifies Sarah that she will make a complaint. (2 marks)