In the Professional Judgment in Context feature presented, we introduced you to 2004-2006 audits of Thornton Precision Components, Limited (TPC) performed by Ernst & Young, LLP, UK (E&Y UK). This case was based on the SEC Accounting and Auditing Enforcement Release No. 3359 (January 2012). Obtain a copy of the AAER at the SEC Web site. Read the sections of the AAER that relate to accounts and assertions in the revenue cycle and address the following issues:
a. Identify the key audit deficiencies related to accounts and asser- tions in the revenue cycle.
b. For each identified deficiency, indicate the appropriate action that should have been taken by the auditor.
c. In assessing the case overall, indicate (1) whether the auditor had an appropriate level of professional skepticism; (2) if applicable, what might have led the auditor to behave in an unethical manner; and (3) whether the sanctions against the auditors seem reasonable.