Jane Is a Sole Practitioner Operating Out of a Local

question 56

Essay

Jane is a sole practitioner operating out of a local office.She is part of a regional group of firms and occasionally does small audits with the assistance of one staff person.Using automated working paper software,she runs a standard set of analytical review calculations for each audit,then puts them in the working paper file.She does not look at the analytical review process again.
Since most of her audit clients have no internal controls,she then calculates materiality and conducts a substantive audit.She prefers to do more substantive testing rather than having to do all kinds of work with internal controls.
Required:
What is wrong with Jane's audit approach?

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Definitions:

Ambrosia

In classical mythology, the food of the gods, which conferred immortality; in general usage, something very pleasing to taste or smell.

Plowshares

Metal blades fitted to a plow, used in farming to cut through the soil.

Comparative Advantage

The ability of an entity to produce goods or services at a lower opportunity cost than other entities, leading to more efficient economic exchanges.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs and production technology.