Ron McLellan established his business, McLellan's Shoes, in 1980. Ron keeps records and his wife helps him

Question:

Ron McLellan established his business, McLellan's Shoes, in 1980. Ron keeps records and his wife helps him prepare basic accounting records. As McLellan's Shoes has no outside owners, Ron has never seen the need to have his books audited.
When Chip Masters from Cloud 9 Inc. expressed an interest in buying McLellan's Shoes in 1992, Ron was asked to provide audited Ron discussed his concerns about having an audit with his friend Ernie Black. Ernie is concerned that Ron may forget their conversations and has asked you to prepare a summary of the issues listed below for Ron.
Required
(a) What are the main differences among a financial statement audit, a review engagement, and a compilation engagement?
(b) What is the difference between reasonable assurance and moderate assurance?
(c) Why would Chip ask Ron to have the for McLellan's Shoes audited rather than reviewed?
(d) What factors should Ron consider when selecting an accounting firm to complete the McLellan's Shoes audit?
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...