Indicate elements that increase and decrease the risk

Assignment Help Accounting Basics

Reference no: EM132726736

Ben Slama LLP is small auditing firm, and the partner in charge has brought you to a meeting with a prospective new client, Bhatia Excavation (BE). During the meeting, you took the following notes.

BE operates in the residential construction industry. As part of their business, BE's owner admitted that they often accept cash payments from clients. He indicated that this was common practice in the industry and insisted that he personally tracks all cash receipts and properly records them.
Excavation services in the Toronto region are in high demand, which has resulted in significant profit increases year after year. It has, however, put a strain on the company's staff as the owner admitted that her accountant now has to do business development as well as accounting. He also didn't have time to file last year's taxes and hopes we can help with this.
BE follows ASPE and has a restricted set of financial users consisting of the owner, a minority shareholder, and two banks.

Required:

Problem 1: Based on the information above, indicate elements that increase and decrease the risk of accepting the audit engagement. For each risk listed, indicate the implications for Ben Slama LLP.

Reference no: EM132726736

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