Marc was the audit supervisor in charge of the audit of a mining company. Previously he had spent all of her time performing audits of retail clients. The audit firm has been short staffed for two years due to the partner's inability to find staff with experience in auditing mining companies. Rather than hiring or promoting another supervisor, the firm reallocated clients. Marc was asked to take on some of the other clients and spend less time reviewing files and supervising staff. The partners were expected to go through more thorough audit review to help compensate for the fewer than usual number of supervisors. Limited audit procedures were done on the audit of the mining company. In fact, Marc simply performed a substantive audit alone as she thought this would improve efficiency.

His audit staff performing the audit of the mining were upset that he had not been present there for several days. Her audit staff left early as they could not address technical issues related to the reserves. It was later discovered that the reserves were incorrect and an opinion other than unmodified should have been provided.

Required:Clearly explain where the Canadian Auditing Standards were violated. (Hint: identify the specific CSQC 1 / CAS 220 requirement and the corresponding breach from the question). To answer this question, you will have to go to the CPA Handbook and review the Elements of the Quality Control Standards. You can also apply the GAAS Standards discussed in the text where applicable.