Four years ago, the European Exchange Club (EEC) was formed in an effort to create a united social group out of several separate regional clubs in the vicinity of the city of Decker, located in central Canada. The purpose of the group is to combine resources to meet the recreational, cultural, and social needs of its collective members. EEC was formed through the collaboration of 10 clubs including Russians, Italians, Portuguese, Greeks, Germans, and others.
It is now December. EEC's executives have spent the last four years planning and preparing for its operation. The club's community center is expected to be fully completed next year. The facilities of the club will include a multi¬ purpose building to house banquets, meetings, and arts activities; hiking trails; indoor/outdoor tennis facilities; bicycle trails; baseball diamonds; an indoor/outdoor pool, and a soccer field.
The multi-purpose building is 75 percent complete, and EEC's executives have stated that it is "approximately within budget" of the total \($3.5\) million cost. The 2 ha of land on which the facility is built were provided by the provincial government by way of a 5-year lease at \($1\) a year. The adjacent land of 24 ha was contributed to the club by The Italian Clubs of Canada. Previously, this land had been leased to a farmer for \($54,000\) a year. The 26 ha will be used for the previously mentioned activities, incurring estimated annual operating costs of \($1.8\) million. Estimated additional operat¬ ing and administrative costs are $750,000.
John Mendez-Smith, the newly elected president of the club, has approached your firm to prepare a report that pro¬ vides recommendations on accounting, finance, and internal control issues. He hag also asked you to identify the merits of an audit arid potential problems that might exist.
Required .

a. What are the advantages to EEC of having an audit con¬ ducted?

b. Why would EEC approach a public accounting firm to provide recommendations on accounting, finance, and internal control issues?

c. What types of services could a public accounting firm provide to EEC?