THE ENTREPRENEUR

After graduating from College you decide that employment with an established accounting firm on is not the career path for you. Youre a resourceful and adventurous individual and you want to create your own business empire. Youve decided to set up an auditing and accounting firm, with the intent to rapidly grow the business and have office locations in 15-20 large cities in the next ten years. You have several college classmates who are interested in your business venture. Youll need to decide how you want these individuals involved in the business. You have around $5000 in cash/capital to use for the business and your college classmates are able to contribute an equivalent amount to the venture.

1. Determine the business structure you will utilize for your business. Discuss the various benefits or disadvantages of the business structure youve selected. Additionally, discuss any regulatory mandates/filings that may be required with establishing your business structure. Briefly discuss how the business would address management issues, funding/debt and distribution of profits/losses associated with the business.

2. After your business is in operation, consider any primary legal risks or issues that may confront your business. Think in terms of relationships your business has with clients, regulatory/governmental agencies, employees and/or the public (third parties). Identify the top five legal concerns or risks your business will face in connection with these business relationships. Explain why these are primary legal risks relative to your business and what you would do to reduce or minimize these risks. Assuming you can efficiently establish your business, identify the legal risks and conduct business ethically, you should be able to achieve your objectives. Provided you dont, bankruptcy may be on the horizon.

THE APPRENTICE

You have been working at an accounting firm and have been recently promoted to a Vice President position. With the promotion, the CEO has requested you to head up a newly created compliance and ethics department within the firm. The company is privately owned and has 10 offices in various locations throughout the Midwest. There are currently 30 employees, with 10 maintaining a CPA designation. The firm does a substantial amount of accounting and tax work with local businesses.

1. The accounting firm does not currently maintain any formal policies or procedures for employees. In your new role, the CEO requests you to develop a policy and procedure manual. Draft a Mission Statement or Policy that contains at least five practices or procedures the accounting firm will adopt and follow to help ensure the firm and its employees are complying with applicable regulations or accounting standards and conducting business ethically. Explain why these practices or procedures when adopted by the firm will ensure compliance and ethical behavior within the firm

2. Identify five issues or topics that you believe are needed in the firms contracts with its clients to clarify the relationship with the client and reduce or limit the firms exposure to liability claims. In connection with these five issues, describe how you would address the these issues (clarify the relationship or reduce exposure to liability) in your clients contract and draft a provision to incorporate in the firms contract to address the issue. Assuming you can develop an effective compliance program for the firm and contractually reduce risks to the firm, you may be on your way to replacing the CEO who is considering retirement in the next few years.