Acc 1

Question 1: (20 marks) Suppose you are a senior manager in Amex & Co, a small firm of Chartered Certified Accountants, which specializes in providing audits and financial statement reviews for small to medium-sized companies. You are responsible for evaluating potential assurance engagements, and for producing a brief report on each prospective piece of work to be used by the partners in your firm when deciding whether to accept or decline the engagement. Amex & Co. is keen to expand the assurance services offered, as a replacement for revenue lost from the many small-company clients choosing not to have a statutory audit in recent years. Dura Co has been an audit client of Amex & Co. for the past three years. The company owns and operates a chain of retail outlets selling pet supplies. The finance director of Dura Co. recently communicated with your firm to enquire about the provision of an assurance report. Required: You must need to understand this scenario before answering the question. Your answer must be tailored to the scenario. It is pointless, for example, to write about a general acceptance issue which is not specifically related to Dura Co. You need to discuss the importance of assurance services for Dura Co. Also classify assurance services that involve attestation and you will include in your report