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Question - Michelle O'Malley's company, Michelle's Fashions, is a successful fashion business with one store. Michelle is looking to grow the business; however, she needs bank financing to acquire three new locations. As part of the loan process, the bank is requiring an independent audit before it will provide financing. Michelle hires her sister, Dorothy, to perform the audit. Dorothy has experience in auditing non-profit organizations, and she decides to perform the audit the same way as her other audits. After completing all the steps of the audit process, Dorothy issues an unqualified opinion indicating that she is certain that the company's financial statements contain no misstatements. Comment on the potential problems with Dorothy's audit of Michelle's Fashions.
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