ACCT 10 Module 3 You are an audit manager at a regional CPA firm (Wynken, Blynken and Nod). You have recently been appointed to the board of directors of a local monprofit corporation. The chairman of the board of the organization is Bart Bartleby, who is also the owner of a small but growine software development firm (Bartleby's Bytes). You have been quite active in the nonprofit organization and have developed a good relationship with Bart Bart approaches you at the end of a board meeting and asks if you'd be interested in peeforming an audit on his company (Bartleby's Bytes) Bart explains that the company is attempting to secure a substantial amount of additional financing as part ef a plan to acquire a competitor company. The bank has indicated that an audit would be required before the loan could be approved and that annual audits would be required over the life of the loan, i ganted You're very excited about the prospect of bringing a large audt dlient to your firm and you let Bart know that you're defintely interested. You explain that all new dlients must be approved by firm's managing partner, wl Wynken and that Will would expect a certain amount of background information about the company before making a decision. Bart understands and hands you internally prepared financial statements for Bartleby's Bytes for the past three years. Bart aho pives you the names and numbers of the company's banker, the companys legal counsel, and a few business references You review the inancial statements, noting that the company is quite profitable and has been growing quite rapidly over the past three years. You expect that future audit fees would be significant Over the next few days, you contact the references given to you by Bart. All of the feedback is positive. Bart appears to be a highly respected businessman and relationships between the company and its supplies and is astomers appear strong You also rucredit check on the company. Nothing negative appears on the report. Asafinal deck, you google Bart and his company Nothing negative turns up on the company but you do find newipaper artile, dated about five years age, with some information about Bart. Apparently, Bart previously owned a real estate development company. The IRS audited the company and Bart was questioned about the detais of a large capital loss reported on the sale of a tract of land to aust The large capital less significanely decreased the amount of tax paid by the development company during the year under IRS audit Bart told the IRS agent that he had lost ail the supporting documentation for the sale and that he had no way of inding out the names of the principals of the brust. The IRS auditor later discovered that the land was recorded in the name of Bart's daughter and that Bart himself was listed as the trustee. The IRS disallowed the loss and art was asewed a fraud penalty Do you think your firm, should accept Bartleby's Bytes as an audit clere? not, why not? should, what arguments would you give the audit partners to convince them If you think they ACCT 10 Module 3 You are an audit manager at a regional CPA firm (Wynken, Blynken and Nod). You have recently been appointed to the board of directors of a local monprofit corporation. The chairman of the board of the organization is Bart Bartleby, who is also the owner of a small but growine software development firm (Bartleby's Bytes). You have been quite active in the nonprofit organization and have developed a good relationship with Bart Bart approaches you at the end of a board meeting and asks if you'd be interested in peeforming an audit on his company (Bartleby's Bytes) Bart explains that the company is attempting to secure a substantial amount of additional financing as part ef a plan to acquire a competitor company. The bank has indicated that an audit would be required before the loan could be approved and that annual audits would be required over the life of the loan, i ganted You're very excited about the prospect of bringing a large audt dlient to your firm and you let Bart know that you're defintely interested. You explain that all new dlients must be approved by firm's managing partner, wl Wynken and that Will would expect a certain amount of background information about the company before making a decision. Bart understands and hands you internally prepared financial statements for Bartleby's Bytes for the past three years. Bart aho pives you the names and numbers of the company's banker, the companys legal counsel, and a few business references You review the inancial statements, noting that the company is quite profitable and has been growing quite rapidly over the past three years. You expect that future audit fees would be significant Over the next few days, you contact the references given to you by Bart. All of the feedback is positive. Bart appears to be a highly respected businessman and relationships between the company and its supplies and is astomers appear strong You also rucredit check on the company. Nothing negative appears on the report. Asafinal deck, you google Bart and his company Nothing negative turns up on the company but you do find newipaper artile, dated about five years age, with some information about Bart. Apparently, Bart previously owned a real estate development company. The IRS audited the company and Bart was questioned about the detais of a large capital loss reported on the sale of a tract of land to aust The large capital less significanely decreased the amount of tax paid by the development company during the year under IRS audit Bart told the IRS agent that he had lost ail the supporting documentation for the sale and that he had no way of inding out the names of the principals of the brust. The IRS auditor later discovered that the land was recorded in the name of Bart's daughter and that Bart himself was listed as the trustee. The IRS disallowed the loss and art was asewed a fraud penalty Do you think your firm, should accept Bartleby's Bytes as an audit clere? not, why not? should, what arguments would you give the audit partners to convince them If you think they