Question

b. Do professional audit standards require any investigation of prospective clients? c. Suppose Shine also told you that 10 years ago his closely held hamburger franchise busines went bankrupt, and on investigation, you learn from its former auditors (your own firm in anothe city) that Shine was fraudulent in its application of franchise-fee income recognition rules an presented such difficulties that your firm resigned from the audit (before the bankruptcy). Do yo think the partner in charge of the audit practice should accept Hitech as a new client? 3.61 Using the Work of Internal Auditors. North, CPA, is planning an independent audit of the financial statements of General Company. In determining the nature, timing, and extent o the audit procedures, North is considering General's internal audit function, which is staffec by Tyler. Required: a. In what ways can the internal auditor's work be relevant to North, the independen b. What factors should North consider and what inquiries should North make in decidin (AICPA adapted) whether to use Tyler's internal audit work? and Account Balances. AMI International is a large office products company. Headquar- n managers to meet profit fore 3.62 Using the Computer to Discover Intentional Financial Misstatements in Transactions

what factors should north consider and what inquiries should north make in deciding whether to use Tyler's internal audit work?

Answer 1