Competition and Audit Proposals. Accounting firms are often asked to present “proposals” to companies’ boards of directors. These proposals are comprehensive booklets,accompanied by oral presentations, telling about the firm’s personnel, technology, special qualifications, and expertise in the hope of convincing the board to award the workto the firm.Kourtney Dena has a new job as staff assistant to Selby Michael, chairman of the boardof Granof Grain Company. The company has a policy of engaging new auditors everyseven years. The board will hear oral proposals from 12 accounting firms. This is the second day of the three-day meeting. Dena’s job is to help evaluate the proposals. During thefirst day of meetings, the proposal presented by Eden, Benjamin, and Block was clearlythe best.At the end of the day, Dena sees Michael’s staff chief slip a copy of Eden, Benjamin,and Block’s written proposal into an envelope. He then tells Dena to take it to a friendwho works for Hunt and Hunt, a public accounting firm scheduled to make its presentationtomorrow, saying, “I told him we’d let him glance at the best proposal.” Michael is absentfrom the meeting and will not return for two hours.Required:What should Dena do? What should CPA Hunt do if he receives the Eden, Benjamin, andBlock proposal, assuming he has time to modify the Hunt and Hunt proposal before tomorrow’s presentation?
Competition and Audit Proposals. Accounting firms are often asked to present “proposals” to companies’ boards of directors. These proposals are comprehensive booklets,
accompanied by oral presentations, telling about the firm’s personnel, technology, special qualifications, and expertise in the hope of convincing the board to award the work
to the firm.
Kourtney Dena has a new job as staff assistant to Selby Michael, chairman of the board
of Granof Grain Company. The company has a policy of engaging new auditors every
seven years. The board will hear oral proposals from 12 accounting firms. This is the second day of the three-day meeting. Dena’s job is to help evaluate the proposals. During the
first day of meetings, the proposal presented by Eden, Benjamin, and Block was clearly
the best.
At the end of the day, Dena sees Michael’s staff chief slip a copy of Eden, Benjamin,
and Block’s written proposal into an envelope. He then tells Dena to take it to a friend
who works for Hunt and Hunt, a public accounting firm scheduled to make its presentation
tomorrow, saying, “I told him we’d let him glance at the best proposal.” Michael is absent
from the meeting and will not return for two hours.
Required:
What should Dena do? What should CPA Hunt do if he receives the Eden, Benjamin, and
Block proposal, assuming he has time to modify the Hunt and Hunt proposal before tomorrow’s presentation?
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