Part 1 (500-750 Words) In preparation for the Bovar Company’s year-end audit, your managerhas asked you to create a document about auditing principles and thecode of conduct to share with the rest of the internal auditors. Youknow that the Institute of Internal Auditors (IIA) provides professionalguidance and a code of ethics for internal auditors, but you need torevisit that information to create the memo.Prepare a 2-page document that discusses the following:Auditing principlesCode of conduct Part 2 (500-750 Words)Group PortionTo assess Bovar’s liability for the upcoming external audit, discussthe following topics with your team in the small group Discussion Board:What is the relationship of risk and materiality?How are risk and materiality related?How are risk and materiality integrated into the audit process?What is an example of a statement that includes both risk tolerance and materiality? Individual PortionBased on the group discussion, apply a risk assessment technique to decision making by using the following example:Assume that you are going to use nonstatistical sampling to evaluatethe results of accounts receivable confirmation for the Bovar audit.Results from previous audits have been excellent. Because of the highquality of the controls at Bovar, you have decided to use an acceptablerisk of incorrect acceptance of 10%. There are 3,000 accounts receivablewith a gross value of $9,601,883. You have decided that anoverstatement or understatement of more than $150,000 would beconsidered material.Complete the following:Calculate the required sample size using the following formula:Sample size = (book value of population / tolerable misstatement) x assurance factorAssurance factor:5% ARIA = 310% ARIA = 220% ARIA = 1 Assume that instead of good results from previous audits, Bovarhad poor results and the controls in place were questionable. Discussthe following:How would this affect your sample size?How would you use this information in your sample size determination?How would you select the accounts for testing using systematic selection?