Grand slam Co. operates the largest sports and entertainment business in the United States. Grand slam recently
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At first glance, Jim, the managing partner of a mid-size public accounting firm thinks that Grand slam would be a great opportunity to expand his firm into the sports and entertainment industry. Furthermore, its clean accounting record suggests that Grand slam would be a low-risk client for the firm. Upon putting together his firm’s proposal, Jim realizes that to fill the audit’s needs, his firm would need to fly in an array of specialists and resources from around the country. This would create a significant cost that Grand slam would likely view unfavorably. Furthermore, there have been recent rumors that Grand slam is considering an IPO.
Required:
a. Although Grand slam appears to be a great opportunity and low-risk client, what are some issues that would make the company an unfavorable potential client for Jim’s firm?
b. Why are the potential costs of staffing the audit significant? What are the business risks to Jim’s firm?
c. Why is the potential IPO significant to Jim’s decision on the proposal? Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Related Book For
Auditing and Assurance Services Understanding the Integrated Audit
ISBN: 978-0471726340
1st edition
Authors: Karen L. Hooks
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