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Question - EVC, CPA, accepted an engagement to audit the financial statements of Foothill Co., a new client. Foothill is a publicly held retailing entity that recently replaced its operating management.
In the course of applying audit procedures, EVC discovered that Foothill's financial statements may be materially misstated due to the existence of fraud.
Required -
(a) Describe Deanza's responsibilities on the circumstances described above.
(b) Describe EVC's responsibilities for reporting on Foothill's financial statements and other communications if EVC is precluded from applying necessary procedures in searching for frauds.
(c) Describe EVC's responsibilities for reporting on Foothill's financial statements and other communications if EVC concludes that Foothill's financial statements are materially affected by frauds.
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