heve on detaction risk.

a$.$ Johnson Inc. is a fast$-$growing trucking company operating in the southeastem part of the United States. The company is publicly held, but Ivan Johnson and his sons control $55$ percent of the stock. Ivan Johnson is chairman of the board and CEO. He personally makes all major decisions with little consultation with the board of directors. Most of the directors, however, are either members of the Johnson family or longstanding friends. The board basically rubber$-$stamps Ivan Johnson's decisions.

b$.$ MaviWrite Corporation is one of several companies engaged in the manufacture of high$-$speed, high$-$capacity data storage devices. The industry is very competitive and subject to quick changes in technology. MaxiWrite's operating results would place the company in the second quartile in terms of profitability and financial position. The company is not a leader in the industry, and its products lack the performance levels of the industry leader.

c$.$ The First National Bank of Pond City has been your client for the past two years. During that period you have had numerous arguments with the president and the controller over a number of accounting issues. The major issue has related to the bank's reserve for loan losses and the value of collateral. Your prior audits have indicated that a significant adjustment is required each year to the loan loss reserves.