Reference no: EM132644560

Question - Mini-case Analysis - You may just write answers right below each requirements on the space provided.

J Pia, a relatively new partner for P Icpa, CPAs has recently received a request to provide a bid a bid to perform audit and other services for P Ice Outfitting, a large regional retailing organization with more than 50 stores in the surrounding region. Ice is a fast-growing company specializing in premium outerwear and outdoor sports equipment. It is not publicly traded. J realizes that bringing in new clients to his success in the firm. Ice looks like a good audit that might provide opportunity to sell other services. Consequently, J is thinking about "lowballing" the audit (i.e., bidding very low on audit fees) in an effort to gain a foothold for providing other services to the client.

Required -

What other information should J gather about Ice before proposing to perform the audit? For each item of information, indicate the most efficient way for J to gather the information.

Auditing firms are often encouraged to bid low for the audit work in order to get the more lucrative consulting work. Explain both the positive and the negative effects of such behavior on the audit function within a public accounting profession. In particular, discuss the potential effect on the audit function within a public accounting firm.

Explain how the auditor could use the SEC filings and industry as well as personal data that may be available on the internet or other data services to gather information about the potential client.

Explain why J would want an engagement letter before beginning the audit.