Lone Star College Financial Analysis Case Study.
I need an explanation for this Accounting question to help me study.
3 Research and Discussion Case
- Put yourself in the role of Rand & Brink, CPAs, and evaluate separately each suggestion made in the meeting. What general term is applicable to most of the suggested actions?
- Could you assure the client that an unqualified audit report would be issued if your recom- mendations were followed on all the matters discussed? Explain.
- Would the discussion in this meeting cause you to withdraw from the engagement?
- Were the auditors justified in issuing a qualified opinion in this situation? Discuss fully, including alternative courses of action.
- State your opinion as to the course of action that was appropriate in this situation.
- Discuss the arguments for and against the auditors insisting that MPS begin expensing some portion of the construction costs rather than continuing to accumulate an ever- increasing asset. Indicate the position you would take as the auditor.
- Discuss whether the auditors should modify their report because of uncertainty about whether or not MPS can remain a going concern. Indicate the type of opinion that you would issue. (You need not limit yourself to a “going-concern” modification.)
FASB Accounting Standards Codification sections 360-10 and 450-20-25-2. Part b:
AICPA AU-C sections 570 and 700–706; PCAOB AS sections 2415 and 3101.