Accounting firms are often asked to present “proposals” to companies’ boards of directors. These proposals are comprehensive booklets, accompanied by oral presentations, telling about the firm’s personnel, technology, special qualifications, and expertise in the hope of convincing the board to award the work to the firm. Kourtney Dena has a new job as staff assistant to Selby Michael, chairman of the board of Granof Grain Company. The company has a policy of engaging new auditors every seven years. The board will hear oral proposals from 12 accounting firms. This is the second day of the three- day meeting. Dena’s job is to help evaluate the proposals. During the first day of meetings, the proposal presented by Eden, Benjamin, and Block was clearly the best.
At the end of the day, Dena sees Michael’s staff chief slip a copy of Eden, Benjamin, and Block’s written proposal into an envelope. He then tells Dena to take it to a friend who works for Hunt and Hunt, a public accounting firm scheduled to make its presentation tomorrow, saying, “ I told him we’d let him glance at the best proposal.” Michael is absent from the meeting and will not return for two hours.

What should Dena do? What should CPA Hunt do if he receives the Eden, Benjamin, and Block proposal, assuming he has time to modify the Hunt and Hunt proposal before tomorrow’s presentation?

  • CreatedOctober 27, 2014
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