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The CPA firm of May & Marty has audited the consolidated financial statements of BGI Corporation. May & Marty examined the parent company and all subsidiaries except for BGI-Western Corporation, which was audited by the CPA ?rm of Dey & Dee. BGI-Western constituted approximately 10 percent of the consolidated assets and 6 percent of the consolidated revenue.
Dey & Dee issued an unquali?ed opinion on the ?nancial statements of BGI-Western. May & Marty will be issuing an unquali?ed opinion on the consolidated ?nancial statements of BGI.
Required
a. What procedures should May & Marty consider performing with respect to Dey & Dee's examination of BGI-Western's ?nancial statements that will be appropriate whether or not reference is to be made to the other auditors?
b. Describe the various circumstances under which May & Marty could take responsibility for the work of Dey & Dee and make no reference to Dey & Dee's examination of BGI-Western in its own report on the consolidated ?nancial statements of BGI.
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