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:

Brown Algae

Brown algae are a group of multicellular marine plants known for their distinctive brown or olive color, which results from the presence of the pigment fucoxanthin.

Largest Protists

Protists, being a diverse group of eukaryotic organisms, range in size, with the largest ones like kelp reaching lengths of several meters.

Golden Algae

Golden algae are a group of algae belonging to the class Chrysophyceae, known for their distinctive yellow and brown carotenoid pigments.

Colonial

Colonial refers to organisms that live in colonies, where individuals of the same species live together in close proximity for mutual benefit, often leading to specialized functions within the colony.