Raul,PA,received a Call from His Friend Cristobal Franco

question 96

Essay

Raul,PA,received a call from his friend Cristobal Franco.He needed an audit urgently,because the bank might call his loan for his computer store CF Ltd.Since Cristobal had been his high school friend and they still played soccer together every two weeks,Raul agreed.Raul and Cristobal had a quick meeting,where Raul fixed the audit fee at $10 000.Cristobal stressed the importance of an unqualified opinion for the bank.
Raul sent two available junior staff to CF's offices.The junior staff were experienced in review engagements,and had been working for Raul for about six months.The two staff had a quick look around the store,noting the documents strewn everywhere.The accounting staff came in and chatted briefly after their smoke break.They were about a month behind on recording transactions,because Cristobal had laid off one salesperson.The accounting staff also helped out with providing sales quotes and Cristobal did all of the technical work.
At the end of the day,the junior staff were each given a $250 gift certificate to be used in the computer store.This was great,because CF also sold MP3 players and supplies such as CDs and DVDs.
At dinner that night,the junior staff told their family that it would probably be a great idea to hold off on any computer supplies or equipment purchases that they needed,since CF would likely hold a sale in the next month or two to improve cash flow.
Required:
Identify and discuss the violations in the rules of conduct with respect to CF.

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Definitions:

Psychographic Variables

Characteristics of individuals, including their lifestyles, interests, opinions, and values, used in market segmentation.

Geographic Location

The specific physical place or position of something, often defined by coordinates or a description of the environment.

Market Trends

The general direction in which the market moves, influenced by various factors including economic conditions, consumer behaviors, and technological advancements.

Trade Shows

Events where companies in a specific industry gather to showcase and demonstrate their new products and services.