Corporation to perform compilations and tax returns

Assignment Help Operation Management

Reference no: EM131759169

Smuckers & Nudge, CPAs, have previously been engaged by Gerrimander Corporation to perform compilations and tax returns. Harry Gerrimander, the company’s president, indicated to the accountants that he needed “something more” than they previously provided. Mr. Gerrimander told Jenny Holt, the partner in-charge of the engagement, that the resulting ?nancial statements from this proposed engagement would be used primarily for management’s purposes internally as well as short-term bank loans. Holt recommended that a review of the ?nancial statements be performed and work be commenced without an engagement letter. As Holt proceeded with the work, she indicated uneasiness about certain ?gures and conclusions but said she would take the client’s word about the validity of some entries since the review was primarily for internal use and was not an audit. If Holt had not relied on the representations of management, she would have detected a material act of fraud committed by management.

(a) Explain the role that an engagement letter could have played in this scenario and indicate what should have been covered in the letter.

(b) What was Holt’s duty in this review? What is the potential liability faced by Smuckers & Nudge, CPAs? Who may assert claims against the ?rm?

Reference no: EM131759169

Questions Cloud

Should they ask about immigration status : Is it ethical for human service workers to assist immigrants who they know are in the country without proper authorization? Should they ask about immigration.

Adverse situations that might affect completion of project : Create a list of possible adverse situations that might affect the completion of project goals.

Which organizational structure will the task force utilize : Which organizational structure will the task force utilize? What personnel and skills will the task force need to investigate the top three cyber threats?

Create balance sheet to work out the owner equity : Create a balance sheet to work out the owner’s equity at March 30, 2015.

Corporation to perform compilations and tax returns : Smuckers & Nudge, CPAs, have previously been engaged by Gerrimander Corporation to perform compilations and tax returns.

What are the steps to take to assemble : Can Someone please help me to understand what are the steps to take to assemble, develop, and manage the project team.

Determine cultural diversity of workers ethics : You will need to discuss: communication in relation to the achievement of work responsibilities consultation the resolution of issues raised by workers.

Which factors are not covered in basil peters analysis : How much is a customer worth? How much does it cost to acquire an additional one? Which factors are not covered in Basil Peters' analysis?

What services are available for victims of racial profiling : What laws and services are available for victims of racial profiling? What other actions might be taken on behalf of victims of racial profiling?

User Account

All Pages