Question # 2

Prescott is conducting the audit of the financial statements of Mueller. In addition to the financial statement audit, various union groups have requested that Mueller provide evidence of compliance with the Fair Labor Standards Act (FLSA) of 1938. When discussing this matter with Prescott, he indicated that he could expand the auditors' report to reference compliance with the FLSA. Required: a. Under generally accepted auditing standards, is Prescott permitted to evaluate compliance with FLSA? If so, what procedures beyond those in a financial statement audit should he perform? b. What are the options available to Prescott for reporting on compliance with the FLSA in conjunction with his audit of the financial statements? c. What matters should Prescott address with respect to compliance with the FLSA in his report (assume that a separate report on compliance is prepared)? (Do not write the actual report).20 points Sklpped EEDOK Print References Davis has a store that sells old baseball cards. To expand the business. he has decided to open an Internet site where potential customers can view the cards and place orders. Davis hires Johnson, who is an expert in constructing websites for small businesses. She explains that even with a quality website and pictures of the merchandise for sale, customers may be reluctant to purchase baseball cards from Davis's website. Required: a. Explain the reasons for Johnson's concerns. A b. What steps can Davis and Johnson take to reduce customer's reluctance to make purchases on the Internet