You are one of three partners who own and operate Sam’s Cleaning Service. The company has been operating for 10 years. One of the other partners has always prepared the company’s annual financial statements. Recently you proposed that the statements be audited each year because it would benefit the partners and preclude possible disagreements about the division of net earnings. The partner who prepares the statements proposed that his nephew Roger, who has a lot of financial experience, can do the job and at little cost. Your other partner remained silent.

Required:

1. What position would you take on the proposal? Justify your response.

2. What would you strongly recommend? Give the basis for your recommendation.