Mobile Home Manufacturing Company is audited by the public accounting firm Rossi and Montgomery. Mobile Home has decided to issue shares to the public and wants Rossi and Montgomery to perform all the audit work necessary to satisfy the requirements for filing with the Ontario Securities Commission (OSC). The public accounting firm has never had a client go public before.
REQUIRED
a. What are the implications of Rossi and Montgomery accepting the engagement?
b. List the additional issues confronting the auditors when they file with the OSC, as compared with dealing with a private company audit engagement.
c. Using the auditors' personal responsibilities and performance requirements as outlined by GAAS, explain how these issues will impact the audit engagement of Mobile Home Manufacturing.
d. What important quality controls would ensure that Rossi and Montgomery perform a high-quality audit of Mobile Home Manufacturing Company?