You are one of three stockholders who own and operate Marys Maid Service. The company has been
Question:
You are one of three stockholders who own and operate Mary’s Maid Service. The company has been operating for seven years. One of the other stockholders has always prepared the company’s annual financial statements. Recently, you proposed that the statements be audited each year because it would benefit the stockholders. The stockholder who prepares the statements proposed that his uncle, who has a lot of financial experience, can do the job at little cost. The other stockholder remained silent.
Required:
1. What position would you take on the proposal? Justify your response in writing.
2. What would you recommend? Give the basis for your recommendation.
Step by Step Answer:
Fundamentals of Financial Accounting
ISBN: 978-0078025914
5th edition
Authors: Fred Phillips, Robert Libby, Patricia Libby