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my assignment is external auditing and I need help how with providing a solution for me, all the qouistion with requiredment itis in the attuchement

External Auditing-Spring 2017- 2331-023 Assignment #1- Due Class 5- Wednesday May 31, 2017 55 marks Question 1 (10 marks) As part of the audit of corporate governance, International Insurance Inc. (III) has agreed that they will conduct an audit of the audit committee oversight process. The audit will be conducted by a consulting organization that specializes in internal audit outsourcing and audit consulting. The scope of the audit is to compare III's audit committee practices to published best practices for audit committees. III has requested an analysis of their audit committee practices, as well as suggestions for improvement where warranted. To facilitate the audit, you, CIA (Certified Internal Auditor), an employee of the consulting organization, have accumulated a list of best practices from two internal control frameworks and from publications provided by the CICA (Canadian Institute of Chartered Accountants) and from the (IIA) Institute of Internal Auditors. III will provide a copy of the corporate audit committee charter, as well as the agreed upon scope of work of the audit committee, and minutes of the board meetings of both the audit committee and the board for the last two years. III has also agreed that one hour interviews will be held with individual audit committee members, executive management, the director of internal audit and the audit partner responsible for the financial statement audit of III. These interviews have been scheduled over a two week period. Required: Describe the five components of the definition of auditing. For each component, identify which aspects of the narrative above fit the definition. Use a table, as shown below, to organize your response: Description of definition of auditing components Aspect of the narrative above that fits the definition Question 2 ( 9 marks) Yves Laurent has just been put in charge of the BeautyNatural Inc. audit. BeautyNatural is a small, but growing retail chain of natural cosmetics stores. BeautyNatural needs to borrow from the bank to finance its growth, and the bank has asked to see BeautyNatural's audited financial statements before it will increase the loan. This is the first year BeautyNatural has been audited. Because this is his first audit as a senior, Yves was determined to bring the job in on budget. He felt that this task would be made easier by the fact he would receive excellent co-operation from the client as his sister-in-low was the accounting manager at Beauty Natural. Yves has been assigned two inexperienced staff assistants for the audit. To save time, Yvese gave the assistants the audit plan for Health Drug Stores (Health), another audit he worked on. He told his staff that this would make things go more quickly. He also told them that he could not spend much time with them at the client's place of business because \"my time is billed out at such a high rate, we'll go right over budget.\" He did call them once a day from another audit on which he was working. The assistants told Yves that the audit programs did not always match up with what they found at Beauty Natural. Yves responded, \"Just delete whatever is not relevant in the audit program, but don't add anythingit will only make us go over the budget.\" On the last day the staff assistants were scheduled to be at the BeautyNatural's offices, Yves came out to review their work. One assistant told Yves she was concerned that they had not attended the inventory counts at any of Beauty Natural's out-of-town locations. The Health audit program stated that inventory should be observed for in-town stores only, because Health had only one small store out of town. For BeautyNatural three of their five stores are in other cities, including its largest store. In addition, internal control at Health was assessed by the auditors and found to be very effective. For the BeautyNatural audit, the staff assistants asked the warehouse manager about the controls over inventory and he told them \"BeautyNatural is as strong a company as Health Drugs, in every way.\" The assistants assumed that internal controls were also effective at BeautyNatural based on this evidence. When he heard about the additional stores, Yves told the assistants to get inventory listing sheets from the client for their inventory counts at the out-of-town stores. He told them, \"Before you leave here today, make sure that the inventory balance in BeautyNatural's general ledger agrees with the total for all their inventory sheets.\" The next day the staff brought their working papers in to Yves in his office at the audit firm. Yves reviewed the working papers, and recorded his conclusion that \"the financial statements are fairly stated.\" He submitted the completed working papers to his manager for review. Required: Describe which generally accepted auditing standards (GAAS) have been violated. Using case facts, support your conclusion. Arrange your answer in the table below and on the next page: Description of GAAS that has been Using case facts, support your conclusion violated Description of GAAS that has been violated Using case facts, support your conclusion Question 3 (8 marks) Each of the three independent situations below may involve a violation(s) of the rules of professional conduct of CPA Ontario. Required: For each of the three situations below, describe the Rules of Professional Conduct violated and explain the nature of the violations. Situation # 1 (2 marks) Jessica Khan, CPA, CA, has Relco Corporation as an audit client. Relco asked Jessica to create and install a new computerized payroll system. Because Jessica does not have the appropriate level of expertise, she referred Relco to Systems Running Inc. (SRI), a local software consulting company. Jessica has an arrangement with SRI wherein she is paid ten percent of any fee received by SRI from her referrals. Jessica has disclosed this to her client. Situation # 2 (2 marks) Lily Tomlinson is the in-charge auditor on the audit engagement of Xalam Corporation, a public company. The chief financial officer of Xalam has recently called Tomlinson to ask for some advice on the accounting treatment for some complex transactions. According to the chief financial officer \"it would be best to get it right now rather than later.\" Tomlinson agrees with this and provides the advice. Situation # 3 (4 marks) Avneet Babbar, CPA, CA, has discovered a way to eliminate most of the boring work of processing routine accounts receivable confirmations by contracting with the Better Mail Service (BMS). After the auditor has selected and prepared the confirmations, BMS stuffs them in envelopes, mails them, receives the return replies, opens the replies, keeps track of replies not received and returns them to Avneet Question 4 (28 marks) Askinoise Chocolate (AC) is a privately owned small batch chocolate manufacturer, located in Picton, Ontario. In 2005, the company was founded by Shawn Askinoise, who left a successful career as a criminal defense lawyer to start his own business. There are two key elements to ACs success. First, the business model hinges on being a good neighbor and citizen. AC is committed to creating a program they call 'direct trade,' in which they source their chocolate beans directly from small farmers in the four growing regions - Tanzania; Ecuador; Philippines; and Honduras. Shawn has developed personal trusted relationships with each of these farmers. Since 2006 he has made over 40 personal trips visiting farmers in these regions. The 'direct trade' program is beneficial for the farmers because they get to keep most of the money rather than paying middlemen in the supply chain and AC pays more than Fair Trade prices. (Fair trade is the minimum prices set by Fair Trade International that importers will pay agriculture producers in developing countries.) In many cases, AC wires the money directly into bank accounts they helped the farmers set up. AC has profit sharing agreements with each of the farmers whereby each farmer is entitled to a percentage of the gross margin. During Shawn's annual visits to the farmers he shares AC financial statements and uses the financial statements to demonstrate how AC reached a profit using their beans and explains how they can influence that profit through superior farming methods. The second element of AC's success is the way it is made - in small batches and in-house. The process, which involves over 70 steps - many of which are manual intensive, requires extensive investment in equipment. One piece of equipment is an artisanal piece that is over 70 years old. The equipment loan, which was secured in 2005 by Shawn's personal guarantee, was completely paid off in 2015. The equipment is now 10 years old and many pieces, including the artisanal piece require extensive maintenance, other pieces require replacement. With the growth in sales, AC also needs new equipment to expand production capacity. Shawn plans on securing an additional loan in 2016. \"Harris and Harris LLP\