The last paragraph of the problem, as copied below, should make reference to the owners, Sam and Barry Johnson, not Jim and David Johnson. This correction should make the ownership of the Company consistent throughout.

The Companys owners, Jim, and David Johnson inherited the Company from their father, Raymond and have worked in the business for their entire lives. Neither of them has an accounting background. Jim has a degree in management from a local college and David has a degree in engineering from ODU. Both Jim and David are very hands on with the business and its finances.

Please help!

OCCT 411 Fall 2022 Non-Attest Services You are an experienced staff accountant with Hodges, Jones \& Gentry (the Firm) and have been assigned to work on the audit of RB Johnson Electric Company (the Company) as of and for the year ended December 31, 2022. The Company, which is engaged in electrical construction, was formerly audited by David Reedy \& Associates (the Prior Auditor) and 2022 will be the Firm's first audit of the Company. This is a relatively small entity, and the entire audit will be done by you and the engagement senior, Adam Salvia. Adam is an up and coming professional in the Firm and this is your first engagement working with him. One of your colleagues has worked with Adam before and she has told you that Adam is very good technically but has tendency to wait until the last minute to raise issues and to review work performed by his staff. As a part of the Firm's formal acceptance of the Company as an audit client, you and Adam reviewed the workpapers of the Prior Auditor as of and for the year ended December 31, 2021. As a part of this review, you and Adam discovered that the Prior Auditor had prepared the Company's 2021 financial statements from the Company's adjusted trial balance. Further discussion with the Company's owners indicates that they have an expectation that the Firm will perform the same service for the year 2022. At Adam's request, you had made a lot of notes with from meetings with the Prior Auditors and the ownership of the Company, Barry, and Sam Johnson. You remember that Adam asked a lot of questions around the work that the Prior Auditor's had done with respect to the preparation of the financial statements. A summary of your notes (as they relate to the financial statement preparation) from these meetings follows. - The engagement partner with the Prior Auditor indicated that the Company's accounting staff is limited, but the accounting manager, Melissa Dodgers, is "pretty good". Most of the 2021 journal entries related to accounting for in process jobs under the percentage of completion method of accounting. - Melissa is not a CPA and most of her accounting knowledge was developed working with the Company under the supervision of the Company's former (now retired) accounting manager, Joe Wells who was a CPA. Melissa has taken some accounting courses at the local community college, but she readily admits that she struggles some with percentage completion accounting. - The Company's owners, Jim, and David Johnson inherited the Company from their father, Raymond and have worked in the business for their entire lives. Neither of them has an accounting background. Jim has a degree in management from a local college and David has a degree in engineering from ODU. Both Jim and David are very hands on with the business and its finances. Assumptions - Financial statement preparation will be the sole non-attest service performed by the Firm for the Company during and after the year 2022. - The Company successfully adopted ASC 606 in a prior year and the Firm is not being asked to assist with the adoption of this accounting standard. - The Company does not have any leases and therefore will not be required to adopt or have any assistance with the adoption of ASC 842. Required By reference to ET sec. 1.295.010.06 and the AICPA's Frequently Asked Questions: Non-Attest Services as of October 6, 2021, prepare a memo, for Adam's review, addressing, the Firm's preparation of the Company's financial statements as of and for the year ended December 31, 2022. For purposes of this memo, assume that the Company successfully adopted the provisions of ASC 606 in a prior year. This memo should include: 1. The impact, if any, that this non-attest service may have on the matters included in the Firm's 2022 engagement letter with the Company; 2. The Company's acceptance of its responsibilities, if any, associated with this non-attest service for preparation of the 2022 financial statements; and 3. Your initial evaluation of the Company's ability to provide an individual with responsibility for oversight of this non-attest service OCCT 411 Fall 2022 Non-Attest Services You are an experienced staff accountant with Hodges, Jones \& Gentry (the Firm) and have been assigned to work on the audit of RB Johnson Electric Company (the Company) as of and for the year ended December 31, 2022. The Company, which is engaged in electrical construction, was formerly audited by David Reedy \& Associates (the Prior Auditor) and 2022 will be the Firm's first audit of the Company. This is a relatively small entity, and the entire audit will be done by you and the engagement senior, Adam Salvia. Adam is an up and coming professional in the Firm and this is your first engagement working with him. One of your colleagues has worked with Adam before and she has told you that Adam is very good technically but has tendency to wait until the last minute to raise issues and to review work performed by his staff. As a part of the Firm's formal acceptance of the Company as an audit client, you and Adam reviewed the workpapers of the Prior Auditor as of and for the year ended December 31, 2021. As a part of this review, you and Adam discovered that the Prior Auditor had prepared the Company's 2021 financial statements from the Company's adjusted trial balance. Further discussion with the Company's owners indicates that they have an expectation that the Firm will perform the same service for the year 2022. At Adam's request, you had made a lot of notes with from meetings with the Prior Auditors and the ownership of the Company, Barry, and Sam Johnson. You remember that Adam asked a lot of questions around the work that the Prior Auditor's had done with respect to the preparation of the financial statements. A summary of your notes (as they relate to the financial statement preparation) from these meetings follows. - The engagement partner with the Prior Auditor indicated that the Company's accounting staff is limited, but the accounting manager, Melissa Dodgers, is "pretty good". Most of the 2021 journal entries related to accounting for in process jobs under the percentage of completion method of accounting. - Melissa is not a CPA and most of her accounting knowledge was developed working with the Company under the supervision of the Company's former (now retired) accounting manager, Joe Wells who was a CPA. Melissa has taken some accounting courses at the local community college, but she readily admits that she struggles some with percentage completion accounting. - The Company's owners, Jim, and David Johnson inherited the Company from their father, Raymond and have worked in the business for their entire lives. Neither of them has an accounting background. Jim has a degree in management from a local college and David has a degree in engineering from ODU. Both Jim and David are very hands on with the business and its finances. Assumptions - Financial statement preparation will be the sole non-attest service performed by the Firm for the Company during and after the year 2022. - The Company successfully adopted ASC 606 in a prior year and the Firm is not being asked to assist with the adoption of this accounting standard. - The Company does not have any leases and therefore will not be required to adopt or have any assistance with the adoption of ASC 842. Required By reference to ET sec. 1.295.010.06 and the AICPA's Frequently Asked Questions: Non-Attest Services as of October 6, 2021, prepare a memo, for Adam's review, addressing, the Firm's preparation of the Company's financial statements as of and for the year ended December 31, 2022. For purposes of this memo, assume that the Company successfully adopted the provisions of ASC 606 in a prior year. This memo should include: 1. The impact, if any, that this non-attest service may have on the matters included in the Firm's 2022 engagement letter with the Company; 2. The Company's acceptance of its responsibilities, if any, associated with this non-attest service for preparation of the 2022 financial statements; and 3. Your initial evaluation of the Company's ability to provide an individual with responsibility for oversight of this non-attest service