Reference no: EM132824596

Incorporated in 2012, Snappy's primary business is buying, developing, selling, and leasing commercial real estate. Apartment complexes, shopping malls, and industrial parks make up the major portion of the company's business. Starting out in Ortigas Center, Pasig City and the surrounding area, Snappy gradually expanded its operations to include most of Metro Manila, including the Bonifacio Global City area of Taguig City and The Ayala Techno Hub in Quezon City.

• After two years of losses, the company reported its first earnings in 2014. From 2015 tso 2020, revenues and earnings increased dramatically. Earnings for 2021 and 2022, however declined from earlier levels. For the current year, 2023, unaudited net income has rebounded to the 2000 level.
• Block has learned from discussions with Snappy's controller that, as of 12/31/23, the end of the current year, the company was in the process of completing a major mall project. The company currently owns several apartment complexes and leases its completed shopping malls to numerous retail establishments. After having been developed, industrial properties are sold either to municipalities or to companies locating in the complexes.

Problem 1. In deciding whether to accept this engagement, what factors should Block consider?

Problem 2. If he decides to accept the engagement, in what areas should he concentrate his audit resources?