Final answer:
The auditors violated several professional auditing standards in the Just for FEET Inc. case, including the principles of due professional care and independence. Specific audit standards violated include effective planning and supervision, audit evidence, and independence.
Step-by-step explanation:
The auditors in the Just for FEET Inc. case violated several professional auditing standards. They failed to exercise due professional care, which is a fundamental principle of auditing. This violation can be seen in their failure to perform sufficient audit procedures to detect the material misstatements in the financial statements.
Additionally, the auditors also violated the principle of independence by having a significant financial interest in the outcome of the audit. This violation can be seen in the fact that the auditors owned a substantial amount of Just for FEET Inc. stock while conducting the audit.
Specific audit standards that were violated include:
- Effective planning and supervision: Auditing Standard No. 2 requires auditors to adequately plan the audit and supervise the work performed by others. The auditors in this case failed to properly plan and supervise the audit, leading to the failure to detect material misstatements.
- Audit evidence: Auditing Standard No. 5 requires auditors to obtain sufficient appropriate audit evidence to support their conclusions. The auditors in this case did not obtain enough audit evidence to detect the material misstatements.
- Independence: The Code of Professional Conduct requires auditors to be independent in both fact and appearance. The auditors' ownership of Just for FEET Inc. stock compromised their independence.