Compu Group Corporation designs, develops, manufactures and markets a wide range of personal computing products, including desktop personal computers, portable computers, network servers and peripheral products that store and manage data in network environments. The company markets its products to business, home, government and education customers. The company operates in one principal industry segment across geographically diverse markets.

The company is subject to legal proceedings and claims which arise in the ordinary course of its business. Management does not believe that the outcome of any of those matters will have a material adverse effect on the company’s consolidated financial position or operating results.

Required:

A. Based on the information presented evaluate the company for acceptance. List the criteria that must be reviewed in order to determine acceptability.

B. Make a check list for areas covered.

C. Outline your audit approach.