Ocean Manufacturing

-Submit twice, by section

-Times New Roman 12

-6 page (1.5 lines)

Ocean Manufacturing, Inc.

The New Client Acceptance Decision

1. Type of information relevant to evaluating client

2. Steps in deciding whether to accept prospective client

3. Identify and evaluate important factors

4. Process of making and justifying a recommendation regarding client acceptance

Barnes and Fischer, LLP

-Midium-sized, national CPA firm

-Partnership formed in 1954

-Over 6,000 employees

-Mainly auditing and tax services, recently started information-systems-consulting for non-audit clients and non-public audit clients

-Never had client in the home appliance industry (current clients are in health care industry)

-Never audited a company with the specific IT system in place (local office IT team is fairly confident they will be able to diagnose control weaknesses and help Ocean overcome current difficulties)

-Highly recommended by a friend (administrator of a hospital audited by Barnes and Fischer)

Industry

-Past several years, domestic home appliances industry has been growing at a steady pace

-Wide variety of manufacturers (domestic and foreign) who sell to large number of wholesale and retail outlets (wholesale and manufacturer representatives)

-Product marketability linked to growth in housing market (responsive to technological improvements)

Ocean Manufacturing

-Medium-sized manufacturer of small to medium-sized home appliances

-Terminated relationship with the current auditor  to build relationship with more nationally established CPA firm

-Plan to make IPO in the next few years on NASDAQ

-FS are audited in the past 12 years to comply with debt covenants (favourable interest rate on line of credit)

-Dec 31, 2008 (Pg 318)

-Expressed interest in obtaining help to get recently installed IT system in better shape

-Past:

-No aggressive expansion or developing new product lines (maintain steady growth by providing reliable products within a moderate...