The following activities take place at Lohman CPAs during a recurring external audit of Reliance Corp. Classify the activities as value-added or non-value-added from the perspective of Reliance Corp. and compute the service cycle efficiency.

Activity Time (Hours)

Drafting engagement letter ...................... 4

Audit planning and discussion of audit risk ...............20

Internal control review 32 Preparing audit program .........24

Fieldwork, transaction testing, completing work papers ........125

Client discussions and rework ........................16

Drafting and issuing audit report; discussion with board of directors ...23

Audit follow-up discussions ........................20