Description of the Business:

Compu Group Corporation designs, develops, manufactures and markets a wide range of personal computing products, including desktop personal computers, portable computers, tower PC servers and peripheral products that store and manage data in network environments. The company markets its products primarily to business, home, government and education customers. The company operates in one principal industry segment across geographically diverse markets.

Litigation:

The company is subject to legal proceedings and claims which arise in the ordinary course of its business. Management does not believe that the outcome of any of those matters will have a material adverse effect on the company’s consolidated financial position or operating results.

Auditor’s Report:

In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of COMPU GROUP CORPORATION and its subsidiaries at 31 December 1997 and 1998, and the results of their operations and heir cash flows for each of the three years in the period ended 31 December 1998, in conformity with generally accepted accounting principles. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

Required

A. Based on the financial information presented evaluate the company for acceptance. List criteria that must be reviewed in order to determine acceptability.
B. Make a check list for areas covered.
C. Outline your audit approach.