Sean Clem Has Done a Review Engagement and Prepared the Tax

question 75

Essay

Sean Clem has done a review engagement and prepared the tax return for your web design business for the last five years.The books and records have always been well organized,although year-end adjusting entries have been required.You do some of the accounting yourself and the rest of the accounting records are handled by your spouse,who is also an employee of the business.
This year,you would like to expand your business to provide ISP (internet service provider)services to your clients.This would entail you purchasing additional computer equipment and software.You are also considering hiring an additional employee (you currently have three),and you are looking at obtaining a loan for $100 000 from the bank.The bank says that you should have your records audited,but you are not sure what this will mean.
Required:
Identify the issues that Sean needs to consider during the planning of the audit.

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Definitions:

Epigenetics

The study of how external factors can affect gene expression without altering the DNA sequence.

Epigenetics

The examination of variations in living entities resulting from changes in how genes are expressed, without any modifications to the DNA sequence.

Gene Expression

The process by which information from a gene is used to synthesize functional gene products like proteins, influencing an organism's structure and function.

Genetics

The branch of biology that studies the inheritance of physical and behavioral traits from parents to offspring through the transmission of genes.