9. Retain engagement documentation for a sufficient period of time to satisfy the needs of the firm, professional standards, laws, and regulations.

5. Develop effective performance evaluation, competency, capability, and resources to appropriately serve a specific client.

6. Identify circumstances and relationships that create threats to independence and take appropriate action to eliminate those threats or reduce them to an acceptable level.

7. Identify whether the firm possesses the competency, capability, and resources to appropriately serve a specific client.

8. Devote sufficient resources to develop, communicate, and support the firms’ quality control procedures.

1. List the audit risk model.

2. Consider the preceding 4 situations and decide whether the auditor’s conclusion is appropriate using the audit risk model

1. Do you perceive any problems with related-party involvement in the evidence used by Johnson? Explain.

2. Do you perceive any problems with Johnson’s reasoning or the appropriateness of evidence used in the reasoning?

六、Assume that, when conducting procedures to obtaining an understanding of Max Company’sinternal controls, you checked “No” to the following 3 internal control questionnaire items:1. Does access to online files required specific passwords to be entered to identify and validate the terminaluser?2. Does the user establish control totals prior to submitting data for processing? (Order entry applicationsubsystem.)Required:Describe the errors and frauds that could occur because of the weaknesses indicated by the lack of ITcontrols.

1. Based on the information above, identify at least three business risks for ABC Automotive.