The Audit firm Dewy, Cheatham, & Howe has been asked to perform an attest audit of Seriously Crook Puppy Investments (SCPI) Ltd (an investment firm that has been registered with ASIC for 10 years).

Your early assessment of SCPI Ltd indicates that it has a high-risk business environment (0.85), poor to none existent internal controls (0.95), and the detection of problems during any reasonable level of audit is very poor (0.75).

Required:

a) List and discuss what you need to consider before accepting the SCPI Ltd audit engagement.

b) Show the audit risk model and use it to estimate and evaluate the audit risk of the SCPI Ltd Audit engagement.

c) If your firms Audit Risk tolerance is 0.15, would you accept the audit? Explain.

The Audit firm Dewy, Cheatham, & Howe has been asked to perform an attest audit of Seriously Crook Puppy Investments (SCPI) Ltd (an investment firm that has been registered with ASIC for 10 years).

Your early assessment of SCPI Ltd indicates that it has a high-risk business environment (0.85), poor to none existent internal controls (0.95), and the detection of problems during any reasonable level of audit is very poor (0.75).

Required:

a) List and discuss what you need to consider before accepting the SCPI Ltd audit engagement.

b) Show the audit risk model and use it to estimate and evaluate the audit risk of the SCPI Ltd Audit engagement.

c) If your firms Audit Risk tolerance is 0.15, would you accept the audit? Explain.