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whats the standard at each issue and why there might be a violation. 2. When the firm conducts a financial examination, its primary objective is

whats the standard at each issue and why there might be a violation.

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2. When the firm conducts a financial examination, its primary objective is to determine whether the auditee's financial system is properly designed, the system is operating as intended, and the resultant financial records can be relied on. Accordingly, the department does not test explicitly for fraud or other illegal activities. 3. The firm has a formal program of continuing professional education. To eliminate the need to pay for the staff to attend outside courses, it brings in outside experts to conduct 40 hours per year of training. Each year the training is directed to a specific area. This year's area was changes in the federal tax P. 15-4 code; last year's was "how to market the firm." A perfo The firm periodically assigns members of its staff on a temporary basis to government and not-for-profit discuss audit clients. The staff members typically serve as financial consultants or as acting financial admin- istrators. city cou 5. The firm may not test compliance with certain federal grant provisions if the grant was examined by the client's internal auditors and no violations were detected. 6. In its single audit of a client's federally assisted program, the firm detected numerous instances of non- bo compliance with applicable federal regulations. Inasmuch as none of the violations was either serious and or material, the firm reported them to the client in its "management letter" but did not mention them in con its compliance report to federal officials. 7. As part of all financial audits of federal funds recipients, the auditors carefully assess the adequacy of endo internal controls. They do not, however, prepare a specific report on internal controls or address them subi in the standard audit report

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