The Audit Team

The audit team consists of 4 people. The partner is Kellie. She has been involved in the STL audit for over 20 years and partner on the engagement for the last 15 years. The audit manager is Tim. This is Tim's first time on the STL audit. Nisa is the audit senior and is responsible for the initial audit planning. Nisa has recently completed the Graduate Diploma of Chartered Accounting. The graduate on the audit is MingYan. While a student, MingYan worked part-time in the accounting department at STL undertaking basic processing tasks. MingYan's friend is the receptionist at STL. The receptionist has no accounting knowledge and has no involvement with the recording or processing of accounting transactions

The audit team commenced planning the audit on STL in the middle of March 2020. The auditors were delighted to be able to buy toilet paper and tissues from the STL warehouse under the same pricing arrangement available to STL's staff. The interim work on STL was undertaken at the end of March and early April and the final work in early September 2020.

Corporate Governance and the accounting department

The company's Board of Directors consists of 5 directors. Due to the small size of the board, there is no separate audit committee. STL also does not have an internal audit division. The Board of Directors consists of an independent and non-executive Chairman, the CEO who has been with the company for 2 years, a CFO who has been with the company for 3 years, and an independent lawyer and another independent non-executive director. Up until December 2019, the CFO previously worked as an auditor with CPC and was involved on the audit of STL. The CFO is great mates with Tim (the audit manager) and prior to the current season often went to the AFL games each Saturday to support Essendon.

Shareholders are expecting to see a large increase in profit this year as they are aware of the significant increase in toilet paper and tissue sales.

The accounting department is of a reasonable size and has the ability to segregate duties, although this is not something the company focuses on. The increased manufacturing has placed the current accounting staff under extreme stress as the number of staff on the payroll has increased significantly and there has been a large increase in the numbers of suppliers' invoices received and associated goods received notes. In addition, the number of sales orders have doubled. The company chose not to increase the number of accounting staff despite the large increase in manufacturing.

Evaluate the independence of Kellie and MingYan.