First Person Interactive is a developer of computer games. Their business has boomed during the pandemic as people have opted to stay at home for entertainment. 

Sales increased from $120 million in 2020 to $201 million in 2021. 

Net profit before taxes in 2020 was $20 million. In 2021, net profit before taxes and before the write-off of software development costs was $62 million FPI wants to take a large write-down of $22 million in development costs, 

The controller, Kevin Feldstead has told the auditors that this is to clean up the balance sheet to make the company more attractive to potential buyers. 

Required State what type of audit report should be issued. Briefly explain your rationale

Answer rating: 100% (QA)

Based on the information provided the situation raises concerns about the intent behind the writedow... View the full answer