a) Misappropriation of assets which involves inventory theft for the purpose of selling it causing Camia Tire Wholesale Company to pay for goods not actually received that resulted to the irregularity of Antonios activity. b) The case is silent as regards to the involvement of related party transactions. c) The lack of timely and appropriate documentation of transactions and failing to correct known internal control deficiencies before it can get into effect. Thus, material weakness in internal control exists and Brava & Campos are obliged to report it to the management and/or the board of directors. d) The failure to apply extended audit procedures properly shows that the audit was conducted in a negligent manner. Campo should have reviewed the report done by Antonio right after it was presented and he could perchance discover the anomalies. Case no. 2 (Nicolas, CPA) a) Since the bank knew nothing about the falsity of Jupiter Marketing Corporations financial statements and happened to rely on these assertions, Nicolas is said to be liable to the bank as a common party to the tort committed. b) Nicolas is by no means liable to the lessor given that the lessor was a party to the secret agreement. His own fraudulent actions led to his own shortfall. The lessor is then prevented in attaining relief on the basis of unclean hands equitable principle. c) From the time when Nicolas allowed himself to be surmounted by the pressure that its entity caused him to do report improperly, Nicolas was not anymore considered to be independent. Thus, the probability of disciplinary action by the professional organization or regulatory body is to be expected. According to the ethics interpretation on actual on threatened litigation: An expressed intention by the management to commence litigation against the auditor alleging deficiencies in audit work for the client is considered to impair independence if the auditor concludes that there is a strong possibility that such a claim will be filed.