ACC 4247 HW (12)

ACC 4247 HW (12) - Tony Chen 10/20/10 1) What information...

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Tony Chen Chapter 6 10/20/10 1) What information should a CPA firm seek in its investigation of a prospective client? A CPA firm should seek in a prospective client their background and reputations along with major shareholders, directors, and officers. They have to investigate the prospective client’s business with underwriters, bankers, and attorneys. Also they have to look at previous auditors to obtain information about the integrity of management. All that a CPA firm seeks could be found in the financial reports, credit reports, and tax returns. 2) In a public company, what requirements must members of the board of directors satisfy in order to serve on the audit committee? The audit committee of a board of directors is required to have at least three independent directors. To be independent, the directors have to be outside directors and have no relationships with the audit firm that can impair the independence. Also the members must understand the financial statements and have a financial background. 3) State the purpose and nature of an engagement letter.
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ACC 4247 HW (12) - Tony Chen 10/20/10 1) What information...

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