please do problem 3.53

parts A and B

c. Suppose Shine also told you that 10 years ago his closely held hamburger franchise business went bankrupt, and on investigation, you learn from its former auditors (your own firm in another city) that Shine was fraudulent in its application of franchise-fee income recognition rules and presented such difficulties that your firm resigned from the audit (before the bankruptcy). Do you think the partner in charge of the audit practice should accept Hitech as a new client? LO 3-2 3.53 Using the work of Internal Auditors. North, CPA, is planning an independent audit of the financial statements of General Company. In determining the nature, timing, and extent or the audit procedures, North is considering General's internal audit function, which is staffed by Tyler. Required: Page 115 a In what ways can the internal auditor's work be relevant to North, the independent auditor! b What factors should North consider, and what inquiries should North make in deciding whether to use Tyler's internal audit work? (AICPA adapted) @LO 3.4 3.54 Using the Computer to Discover Intentional Financial Misstatements in Transactions and Account Balances. AMI International is a large office products company. Headquarters management imposed pressure on operating division managers to meet profit forecasts. The division managers met these profit goals using several accounting manipulations involving the record keeping system that maintained all transactions and account balances on computer files. Employees who operated the computer DO ao 548 SYL . . + &