Question :

1. Did KPVI's client-acceptance process follow the applicable standards and regulations?

Determine the engagement letter in light of the decision in the 1136 Tenants' case (1136 Tenants' Corp. v. Max Rothenberg & Co., 36 A.D.2d 804, N.Y. App. Div. 1971).

2. Recognize and discuss the pressures faced by Andy Card, the audit partner. How might those pressures affect the decision to accept the client and the performance of the audit?

3. Ace Fritz, an audit manager in the of?ce, was left off the audit team because he owned 5,000 shares of VITALOGISTICS stock. Is KPVI required to disqualify Ace? How does the analysis change if you consider Ace was (a) a partner? (b) an associate?

4. At the team planning meeting in February 20X4, the audit team set overall audit risk at moderate and concluded that detailed testing of all signi?cant balances was still required. Identify and determine the factors relevant to these decisions. Describe why you agree or disagree with the decisions made.