You are an auditor in a large public accounting firm in Ottawa. Brad Moore, the partner

at the audit firm you work for, has asked for some help in deciding whether the firm

should accept a new audit engagement.

You know very little about the company other than what you have learned from Brad. The

prospective client is BioCups, a medium$-$sized private company and manufacturer of

biodegradable styrofoam cups used in the fast food industry. The owner, Sean Green, seemed

like a nice guy when he met him last week on the golf course.

Brad tells you that current bank covenants require BioCups' financial statements to be audited.

A small local audit firm has done the audit since the inception of the company five years ago.

While Sean said he was satisfied with his old auditor, he felt that the company had outgrown

them. In light of the plans to take the company public next year, he felt it was time for a large

national firm to audit his books. Sean was sure that while the old auditors were sad to lose a

client, they would understand and would be very co$-$operative and give them access to view

the old audit files.

Brad is very interested in landing this new client. He has always been interested in "saving the

planet" and likes the thought of associating the firm with such an energy$-$conscious client.

This is a nice change from the financial services clients that the firm is known for.

As the BioCup year$-$end is fast approaching, Brad is anxious to make his decision. He is

having a meeting with Sean tomorrow and has no time to prepare for the meeting, given the

firm's annual golf tournament is today. Knowing that you are not much of a golfer, he has

asked you to stay behind and prepare a list of questions that he will need to ask at the meeting

in order to assist in the analysis of whether the engagement should be accepted. If everything

goes as planned, Brad is going to head straight over to the predecessor audit firm to talk to

them and review the old audit files. He would also like a list of questions for the predecessor

firm and a list of things that he will need to look at in the old audit files and why. Before

starting, you call your friend Paul to ask for a golf lesson when this is all done.