SCENE 2: CONVERSATION BETWEEN LATHAM ASPER AND LESTER DARNAL - PAGE 6

In this conversation, Audit Partner Latham AsperLinks to an external site is asking Audit Committee Chair Lester Darnal if he has seenand if he is concerned withsigns of stress in LDC's accounting team.

Respond to the following questions ensuring you provide examples and concepts from our lessons.

1) State the evidence that LDC is a fast-growing startup. Comment on the reasons why the critical support functions of accounting and internal audit are busy and under stress. Is this typical in a start-up?

2) The external auditor has noticed the accounting department is under stress and has raised the issue with the audit committee chair. Given his oversight responsibilities, should the audit committee chair be more proactive?

3) What additional questions should the audit committee chair ask of the external auditor? Of internal audit? Of the CFO about his finance team?