You are a manager for an independent auditing firm. Your client, Reclamation and Renewal, Inc. $($R&R$),$ is a company that performs in$-$ and outpatient rehabilitation services. Started in $2009$ by entrepreneur Johnny Cleaver, the company grew from one location to $235$ throughout the continental United States. Four years ago, the company became publicly traded on the New York Stock Exchange $($NYSE$).$ At that time, Johnny recruited an impressive group of highly visible board members: General Lewis Jefferson, former head of Homeland Security; Martha Bluford, retail businessperson and television personality; Senator Jeffery Morrill of Kentucky; Pulitzer$-$prize winning author Michelle Preston; and Olympic athlete and tennis star, Scott Stevens. As a leader, Johnny is a firm believer in written goals and objectives with a keen emphasis on surpassing Wall Street annual growth expectations, which R&R has surpassed $12$ percent a year since the company went public. Competition in this industry has become fierce, as large hospital systems build new modern centers for rehabilitation services. An avid skydiver and skier, Johnny creates large$-$scale events for his top executives and clients, featuring his favorite sports. Recently, there has been turnover in the finance accounting office, which you were told is due to personal family issues. The senior auditor on this engagement was recently recruited to be the company$$s vice president for finance. You$$ve been informed the controller of this company works evenings and weekends and never takes a vacation. You are conducting a risk analysis in preparation for the annual audit. The interim $($six$-$month financial statements$)$ compared to the past three years are provided here. Your job is to review the statement and to identify potential areas that could materially misstate the financial statements. Question $4$: Compare and contrast the net income amounts to cash increases or

decreases. Does this make sense? What does a disparity between income and

cash flows suggest?