Questions 1, 2, 3, 4, 5.
ves $3, s-7) The following independent scenarios describe auditor behaviors audit engagement is is the lead audit partner on the audit engagement of a publicly traded 1 ChadChad followed auditing standards on the audit engagement and issued an dified opinion. It was subsequently discovered that the financial statements a material misstatement that had been undetected by the management of the audit team uez, CP, is a sole proprietor. She recently accepted a new audit client who for a bank loan and needed to present audited financial statements to the was not able to complete the audit engagement by herself, so she hired several was applying college students to assist her. The students completed the audit procedures w zidance, and Maria issued an unmodified opinion on the client's financial statements ithout muc On a recent audit engagement, the client firm neglected to inform the audit firm that significant percentage of inventory was stored at an outside warehouse. As a result, the auditors did not observe the physical inventory count for that inventory, which represented 20% of the client's inventory balance. The auditors were able to satisfy themselves that the inventory existed through alternative procedures, and issued an unmodified opinion on the financial statements as a whole. pupers related to an audit engagement on which his audit firm has been named a the CFO regarding the goodwill impairment analysis The audit engagement partner, Marc Johnson, recently received a subpoena for work defendant. Marc asked the staff auditor to remove and discard two memos from the workpaper files documenting communication between the engagement partner and 5. Melissa Louis is the lead engagement partner on a publicly traded company. The com- pan's CEO recently approached Melissa and informed her that they had identified material misstatement in the prior year's financial statements, which had been au dited by Melissa's firm and submitted to the SEC. The CEO suggested they correct the tatement by recording a journal entry in the current year for half of the amount half. Melissa agreed of the misstatement, and in the following year for the remaining since the would be considered immaterial to the financial statements. is plan to avoid a public announcement of a restatement and a potential lawsuit amount of the journal entries recorded in the current and subsequent yea arios listed above, discuss whether the auditor's behavior would be Required egligence, ordinary negligence, gross negligence, constructive fraud, each of t or criminal behavior ves $3, s-7) The following independent scenarios describe auditor behaviors audit engagement is is the lead audit partner on the audit engagement of a publicly traded 1 ChadChad followed auditing standards on the audit engagement and issued an dified opinion. It was subsequently discovered that the financial statements a material misstatement that had been undetected by the management of the audit team uez, CP, is a sole proprietor. She recently accepted a new audit client who for a bank loan and needed to present audited financial statements to the was not able to complete the audit engagement by herself, so she hired several was applying college students to assist her. The students completed the audit procedures w zidance, and Maria issued an unmodified opinion on the client's financial statements ithout muc On a recent audit engagement, the client firm neglected to inform the audit firm that significant percentage of inventory was stored at an outside warehouse. As a result, the auditors did not observe the physical inventory count for that inventory, which represented 20% of the client's inventory balance. The auditors were able to satisfy themselves that the inventory existed through alternative procedures, and issued an unmodified opinion on the financial statements as a whole. pupers related to an audit engagement on which his audit firm has been named a the CFO regarding the goodwill impairment analysis The audit engagement partner, Marc Johnson, recently received a subpoena for work defendant. Marc asked the staff auditor to remove and discard two memos from the workpaper files documenting communication between the engagement partner and 5. Melissa Louis is the lead engagement partner on a publicly traded company. The com- pan's CEO recently approached Melissa and informed her that they had identified material misstatement in the prior year's financial statements, which had been au dited by Melissa's firm and submitted to the SEC. The CEO suggested they correct the tatement by recording a journal entry in the current year for half of the amount half. Melissa agreed of the misstatement, and in the following year for the remaining since the would be considered immaterial to the financial statements. is plan to avoid a public announcement of a restatement and a potential lawsuit amount of the journal entries recorded in the current and subsequent yea arios listed above, discuss whether the auditor's behavior would be Required egligence, ordinary negligence, gross negligence, constructive fraud, each of t or criminal behavior
