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I wrote these:
1.Since it is new regulations and management have no understanding of it may be reluctant to make any decision on their own and may rely on auditor’s advice, so we must be careful not to assume management role.
2. Again it is new regulations and we must review whether we have the expertise and up to date knowledge in this area.
3. The reporting has tight deadline so we must ensure we have the resource to complete it on time for example through temporarily transferring staff from other assignments.
4. The management is willing to pay high fee due to the tight deadline, we must consider possible self-interest threat.3(b) The other is protest against the Group’s operation polluted the forest I think.
What I can recall
3(a) 1. Listed client with same audit partner for 8 years, familiarity threat, should be rotated every 7 years.
2. Audit fee is $250,000, $890,000 so called “special procedures” fee unexplained by partner just stating no threat to objectivity, again listed client a lot of non-assurance services should be prohibited so nature of service to be identified. The non-assurance service fee is around 3 times the amount of audit fee, lucrative non-assurance service can create self-interest threat and the materiality of this service fee should be assessed and not just based on partner’s comment.
3. A newly promoted audit manager input 36 hours in the time sheet and signed off as final reviewer while a senior manager contributes 6 hours only. The audit manager being newly promoted is unfamiliar with her new role and will require direction and supervision/review which should be provided by the senior manager.
4. Audit of going concern is performed by audit associate who simply follow last year procedures and ask for management’s review.
An important part of quality control is assigning tasks based on competency and experienced. Associate is not likely to have the knowledge and experience to challenge management assumptions and audit of GC involves significant subjectivity so should not be assigned to associate.
Part a contains 15 marks so I believe I forgot some points.