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Question - You are having lunch with a member of the board of directors of a prospective client. You have just explained how the audit opinion adds to the confidence of financial statement users by providing reasonable assurance that the financial statements are free of material misstatements. The director than asks what additional benefits the company might attain from the audit and your expertise in the business and industry.
a. How would you respond to the director's questions regarding additional benefits that the company might attain from the audit?
b. What precautions must the auditor take to ensure the he or she remains independent with respect to the audit engagement when providing value added services?
Often research and development costs provide companies with benefits that last a number of years - generally accepted accounting principles require that such costs be recorded as an expense when incurred.
Tom wants to retire at the end of this year (2010). His life expectancy is 20 years from his retirement. Tom has come to you, his CPA, to learn how much he should deposit on December 31, 2010 to be able to withdraw $40,000 at the end of each year ..
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