Reference no: EM132559647

Question - Assume you are accepting the financial statement audit assignment for a client having the following audit related information, identified by an independent consultant & finally confirmed by the engagement partner.

1. Significant material misstatement of financial statements

2. Significant Combined inherent & control risk

3. Illegal activity committed by top management

4. Wide spread thefts & misappropriations is the new normal practice of the company.

5. The name of the entity is associated with mass-media for Bad reputation.

6. All PESTELI (i.e. political, economical, social, technological, environmental, legal & other industry practices) are not in favor of the organization.

7. Disclaimer opinion is becoming the legacy of the entity.

8. Management's intentional use of Dubious accounting policies to narrow expectation Gap's on performances.

9. Visible violations of laws, regulations, agreements & contracts.

Based on the above conditions, events & circumstances identify the appropriate auditor's responses, assuming that the auditor is accepting the engagement.

1. Auditor's staff assignment i.e. nature, composition, & status of auditor's to be assigned.

2. The nature, timing & extent of subsequent audit procedures.

3. The professional skepticism & professional due care of the auditor.

4. To the assessment of detection risk of the auditor.

5. Auditor's reliance on internal control system of the client.

6. Auditor's considerations for the use of the experts.

7. Auditor's assessments for sufficiency & competencies of audit evidences

8. Auditor's communications to those charged with Governances for audit related matters.

9. Audit opinions & conclusions