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1. Upon the performance of those procedures, the auditors of

ZZZZB e s t I n c . h a d o b t a i n e d e v i d e n c e i n o r d e r t o d r a w

r e a s o n a b l e c o nc l us i on s o n w h ic h t o b a se t h e a u d i t o p i n i o n .

H o w e v e r , t h e s e evidences are subject to limitations due to factors not controlled by

theauditors. First limitation of the evidence is its insufficiency to supportthe

occurrence, rel iabi li ty and relevance of events and t ransactions.ere

paperwor! is not enou"h to prove an event to have e#isted.

Ita l s o n e e d s i n $ u i r i e s f r o m p e o p l e a c c o u n t a b l e i n r e

c o r d i n " o r reco"n i% in" such events . oreover, t here&s a ris! i n bein"

dependenton evidences provided by the mana"ement itself. 'uditors should

as!cooperation from the third parties in order to verify all records. (econdlimitation is

the rules implemented by the client which prohibit auditorsto fu r ther i nspec t o r

rev iew the f inanc ia l s tandin" of the company.(ome c l ients ma!e some

arran"ements with the auditors as to

howw i d e t h e i r s c o p e i n a u d i t i n " w o u l d b e . ' s a r e s u l t , a u d i t o r sf a i l t o uncover misstatements or manipulations in the financial

statements. )hird limitation is the consideration of the relationship between thecost of

obtainin" audit evidence and the usefulness of the informationobtained. )here&s a

tradeoff between those two thin"s that

re$uiresa u d i t o r s t o c a r e f u l l y e v a l u a t e t h e m i n o r d e r t o " e t s u f f i

c i e n t a n d reliable evidence.

*. The verifcation that the client was actually receiving payment on certain

jobs was just simply providing Greenspan with the evidence about the

assertion o the payments. However this method does not necessarily show

the completeness and valuation o the payments. The client could have been

receiving payments but they may have not been made in ull, not on time,

and in some cases the payments could not have been made at all. I this

inormation was known this could have lead the audit team to believe that

something was not right and things were not as how inkow did perceive

them to be

!. " #uarterly review report is issued by a $%" and reviewed by an auditor to

provideassurance that the fnancial statements are air and ollow the G""%

standards. &uarterlyreports only provide limited assurance because an

e'ternal auditor does not perormauditing tests to detect control

weaknesses, misstatements or raud. &uarterly reviews areless detailed and

less rigorous than annual audits due to the absence o the e'ternal auditor."

review report does not assess the control risk o a company, which means

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(rnst )*hinney could have not gotten the proper risk that a material

misstatement could occurwithin a relevant assertion. The report could have

pointed out problems in the fnancialstatements but it would not give the

audit teams assurance o their accuracy. (rnst )*hinney never investigated

++++ est-s internal control either, i they had done so theymay have caught

onto some o the raudulent acts that were being committed. The

maindierence between an audit opinion and a review is an audit opinion

provides assurance onthe fnancial statements that they are accurate.

/.