Sanctions individual auditors for violations of generally accepted auditing

Sanctions individual auditors for violations of

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99) Sanctions individual auditors for violations of generally accepted auditing standards. BAnswers: 92) D 93) A 94) C 95) D 96) B 97) A 98) B 99) BA) MonitoringB) Leadership responsibilitiesC) Relevant ethical requirementsD) Acceptance and continuance of clientsE) Engagement performanceFor each of the items below, indicate through the appropriate letter the element of a system of quality control to which it is most closely related.100) Reviewing selected administrative and personnel records. A101) Obtaining written confirmations regarding compliance with appropriate independence. C102) Ensuring that financial considerations do not override the quality of work performed. B103) Establishing policies and procedures for resolving differences of opinion within the engagement team. E104) Devoting sufficient resources for developing, communicating, and supporting the firm's quality control policies and procedures. B105) Evaluating the integrity and business reputation of the client. D106) Identifying circumstances and relationships that create threats to auditor independence. C107) Ensuring the firm's ability to perform the engagement with an appropriate level of professional competence. D108) Maintaining engagement documentation for an appropriate period of time. E109) Assessing the appropriateness of the firm's guidance materials and professional aids. AAnswers: 100) A 101) C 102) B 103) E 104) B 105) D 106) C 107) D 108) E 109) A
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110) Alan Fallon was recently promoted to senior accountant. He was put in charge of the Mellow Markets audit because of his experience with other grocery clients. Mellow Markets has a small, but growing, chain of natural food stores. This is the first year Mellow Markets has been audited. Because of their growth, Mellow Markets needs additional capital and intend to use theiraudited financial statements to secure a loan.Alan has been assigned two inexperienced staff assistants for the audit. Because this is his first engagement as a senior, he intends to bring the job in on budget. To save time, he provided his assistants with a copy of the audit plan for Happy Time Food Stores. He told them that this would make things go more quickly. He also told them that he could not spend much time with them at the client's place of business, because "my time is billed out at such a high rate, we'll go right over budget." However, he did call them once a day from another audit on which he was working.After beginning their work, the assistants told Alan that the audit plan did not always match up with what they found at Mellow Markets. Alan responded, "just cross out whatever is not relevant in the audit plan and don't add anything – it will only make us go over the budget." When Alan came to the client near the end of field work, one assistant was concerned that no inventory observation was done at the out-of-town locations of Mellow Markets (the audit plan had stipulated that inventory should be observed for in-town stores only). Happy Time had only one out-of-town location, while three of Mellow Markets' five stores were in other cities. Alan
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  • Spring '14
  • AnthonySullivan

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