Question

Jacoby & Ricks, CPAs is responding to a request for proposal from Z-Berr Industries, a privately-held company located near Milwaukee. Z-Berr is a rapidly-growing company engaged in the manufacture and distribution of bicycle wheels and tires. The company recently expanded its product offerings into the areas of motor scooters and other small vehicles used for sports and recreation.
Because of its recent growth, Z-Berr is in need of a great deal of assistance in improving its financial reporting systems. It indicates that it needs assistance with some non-audit services, including its income tax planning and tax return preparation, computer systems upgrade and the hiring and training of a systems administrator, and implementation of an internal audit function including the hiring and training of internal audit staff. In addition, the company has requested an integrated audit, as it suspects that an initial public offering is on the horizon.

Required:
a. Assuming that Jacoby & Ricks desires to bid on Z-Berr’s audit engagement, which of the additional non-audit services can the firm include it its proposal? Explain.
b. How would your answer to part (a) change if Z-Berr was already a public company?



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  • CreatedJanuary 21, 2015
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