Need help with an auditing question

Questions two and three worth ten points each. Question one worth 20 points. All answers should be typed. 1. Scott the owner of Scott Inc. hired Nikki, CPA to conduct an audit of the company's records. Scott explained that he needed the audited financial statements to be completed in time to secure a bank loan. Nikki accepted the engagement. Scott promised to pay a fixed amount with a bonus to Nikki if he is able to secure the loan. To speed the process, Nikki hired two business students from the local high school to work on the audit. She told the students to ignore internal controls and to concentrate on transactions that went through the bank and are reflected on the bank statements. Since Scott's business is highly technical in nature, she told the student workers that taking inventory or looking at fixed assets would not be effective since they would not understand the value of the assets they are reviewing. The student workers followed Nikki's instructions. After reviewing their work, Nikki prepared financial statements based on the Scott's General Ledger and issued an unqualified (unmodified) opinion. The financial statements did not include any Notes. Required: Briefly described each problem with Nikki's work and tie the problem with AICPA Principles Underlying an Audit. If relevant, also explain how it violates the PCAOB rules