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this is auditing and assurance service case study - Applying audit processes please i needs correcte answers. Case 1 Ali Mohammed, a partner in a
this is auditing and assurance service case study - Applying audit processes please i needs correcte answers.
Case 1 Ali Mohammed, a partner in a national CPA firm, has just learned that his daughter has accepted a position as the CFO of Sunglasses, Inc., a current client within the office with which he is employed. Explain the independence ramifications on 1) Ali's independence, 2) and 2) the firm's independence. What they can do to maintain their independence? Case 2 Our audit engagement team is planning for the upcoming audit of MADA co. who recently underwent a significant restructuring of its debt. The restructuring was necessary as economic conditions hampered MADA's ability to make scheduled re- payments of its debt obligations. The restructured debt agreements included new debt covenants. In auditing the debt obligation in the prior year (before the restructuring), the team established materiality specific to the financial statement debt account at a lower amount than overall financial statement materiality. In planning the audit for the current year, the team plans to use a similar materiality level. What should the team do regarding restructuring the debt? Is it appropriate to use the same materiality level? Case 3 Norah a staff auditor is testing accounts payable balances. The auditor observes an unexpected fluctuation in the account balance compared to the prior year. The client happens to be walking by, so the auditor asks the client about the fluctuation. The client provides a plausible and reasonable explanation. In considering other possible causes for the fluctuation, the client's explanation seems to be the most likely, so the staff auditor documents it as evidence supporting the fluctuation. Later, it is determined that other facts encountered during the audit do not support the client's explanation. Did Norah violate any rules? If your answer is Yes, identify the rule and what she should have doneStep by Step Solution
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