Bob Jones, a relatively new partner for Kinde & McNally, CPAs, has recently received a request to provide a bid to perform audit and other services for Wolf River Outfitting, a large regional retailing organization with more than 50 stores in the surrounding five-state area. Wolf River is a fast-growing company specializing in premium outerwear and outdoor sports equipment. It is not publicly traded. Bob realizes that bringing in new clients is important to his success in the firm. Wolf River looks like a good audit that might provide opportunity to sell other services. Consequently, Bob is thinking about "low balling" the audit (i.e., bidding very low on audit fees) as an effort to gain a foothold in providing other services to the client.

Required
a. What other information should Bob gather about Wolf River before proposing to perform the audit? For each item of information, indicate the most efficient way for Bob to gather the information.
b. Auditing firms are often encouraged to bid low for the audit work in order to get the more lucrative consulting work. Explain both the positive and negative effects of such behavior on the public accounting profession. In particular, discuss the potential effect on the audit function within a public accounting firm.
c. Explain how the auditor could use the Internet or other data services to gather information about the potential client.
d. Explain why Bob would want an engagement letter before beginning the audit.