Kelsey, a senior accountant at a multi-office CPA firm, is assigned to the audit of Compo Corporation. Compo is a closely held corporation and a major client of the firm. During the audit, Kelsey finds a material cutoff error which causes Compos income to be significantly misstated. Kelsey is aware that the CPA firms policy clearly states the audit senior must document any potential material adjustment in the work papers. The final determination of materiality is then made by the partner in charge of the audit. Kelsey also knows Compo does not want to make the adjustment. Before wrapping up the field work, the audit manager, Bruce, tells Kelsey Lets not mention this adjustment in the work papers. Since Compo is closely held and there are not tax implications, the partner has decided not to force an adjustment. Compo is our largest client. We need to get the Compo work up to the partner as soon as possible. Kelsey is concerned and upset after the conversation with Bruce. Failure to document such a\ material amount just does not seem right. Required: (a)Kelsey has a professional responsibility to document proposed material audit adjustments. Kelsey has been asked by the supervisor to ignore this requirement. Should Kelsey violate professional and personal standards of integrity to comply with the request? (10 marks) (b)Discuss the situations with regards to the following: i.What are the responsibility does Kelsey have to inform affected parties of the request to violate firm policy? (5 marks) ii.What are the benefits and costs to each stakeholder and do the net benefits exceed the net cost to all stakeholders? (5 marks) iii.What are the rights of each stakeholder? (5 marks)