Tayler, a public accountant, is approached by the owner of one of her clients, for whom she normally compiles monthly and annual financial statements, to perform an audit of the company's inventories. The client, Fearless Inc., is a retail clothing store chain in several local shopping malls.

The owner explains that he is seeking new bank financing that will be secured by the inventories as collateral for the loan. The bank has required some additional assurance over the existence, accuracy, and valuation of inventory as a condition of granting the loan. The bank insists that it will lend no more than $75\%$ of the inventories as shown on a schedule of inventories the owner has been asked to submit.

Because the owner urgently needs cash, he offers to pay Tayler a fee equal to $10\%$ of the loan amount?

Should Taylor accept the engagement? Why or why not? $(3$ marks$)$

If Taylor was able to accept the engagement, what level of assurance should she provide? $(2$ marks$)$

Based on the report $($level of assurance$)$ identify two procedures that you would perform. $(4$ marks$)$