SGS Pharmaceuticals is a development stage company (pre-revenue) performing research and development for two novel drugs designed to address specific types of cancers.The Company has two main drugs for which it is continuing research, and Phase 2 trials have continued to show promise.SGS would be a big client for both you and your firm.Please review the information below and the attached client acceptance package, and in a 1-2 page essay, document your considerations and whether you would accept this client.

As part of client acceptance, you have spoken with the Chief Scientific Officer (Sally) the CEO (Greg) and CFO (Sunil) of the Company.Your inquiries revealed no issues.The three each originally owned 1/3 of the Company and each contributed $2m.However, the Company is beginning to need financing, which is why they believe they need an audit. You understand this is fairly common for a company in this place within the business ecosystem.There is also a significant amount of debt on the books.The board is comprised of the three people noted, as well as an independent member, a member who does not have an equity stake in the Company, but who has lent significant debt to the Company.

You inquired with Olga, the independent board member, and she has concerns about whether all the debt on the books actually represent real cash receipts, since so many of the cash receipts were from the "friends and family" round of financing.She certainly cannot rule in any foul play, but she cannot rule it out either.The CFO did not have any similar concerns and believes the books and records are sound.

Note:Be sure to review the client acceptance package and reference material below before responding:

12:25 Q % Q & 5G .| 73% ACCT4040: SGS Client Acceptance Package Background Investigation Forms Summary Name Position SSN Criminal Record Greg CEO XXX-XX-1234 None Sunil CFO XXX-XX-2345 None Sally CSO XXX-XX-3456 None Olga Independent board XXX-XX-4567 None member Page Break Google Search Results Name Position Findings Greg CEO The CEO was implicated in a pump and dump scheme at his last company and noted as a defendant by the SEC. While he received a minor fine for negligence, the results of the SEC investigation found that he was at worst an unknowing asset used in the scheme, which brings into question both his competence and his ethics. Sunil CFO No issues. Very sound professional reputation. Sally CSO No issues Olga Independent board No issues member O12:25 O m :3: In '0' '$' *1 56.nll 73%i PageBreak _____________________________________________ Google Search Results Name Position Findings Greg CEO The CEO was implicated in a pump and dump scheme at his last company and noted as a defendant by the SEC. While he received a minor fine for negligence, the results of the SEC investigation found that he was at worst an unknowing asset used in the scheme, which brings into question both his competence and his ethics. Sunil CFO No issues. Very sound professional reputation. Sally CSO No issues Olga Independent board No issues member Discussions with bankers No issues noted. Company pays timely. No ethical concerns. Discussions with lawyers Company sometimes pays late, but otherwise no issues. No known pending or threatened litigations. The legal team is aware of the CEO's prior history. Initial Due Diligence and Analytical Review The books and records appear auditable and the initial discussions/walkthroughs seem to indicate a relatively high level of sophistication of the accounting team for the Company I\" C) <