Tims Party & RentalsTims Party & Rentals (TPR) is a party and novelty store located just north of Windsor. TPR is aprivate company, and was founded in 2008 by Amanda Harkings. TPR sells all kinds of partyneeds, from balloons to loot bags, and from gift wrap to food items. TPR also sells party suppliesfor special holiday occasions and huge sporting events. TPR has a party room on location thatcan be booked for parties and other special events. TPR has a December 31 year end andoperates by using a fairly simple accounting structure. Jessica Altooze has been the bookkeeperfor TPR since it opened in 2008 and has been diligent in recording the journal entries andpreparing the year-end financial statements. In November 2020, Jessica won the lottery andimmediately retired from the bookkeeping business and moved to South Carolina. This leftAmanda on her own and without any real skills in accounting. Amanda immediately asked herauditor for someone with an accounting background to help her. You work for a publicaccounting firm.TPR had one major creditor at the beginning of 2020. One of the major banks loaned TPR$500,000 for ongoing operating costs. The outstanding portion of the loan was $400,000 at thebeginning of the year. The bank requires TPR to maintain a current ratio of 1.8:1 or the loan maybecome immediately repayable. It also requires TPR to have a debt to total asset ratio of nogreater than 55%.It is now early January 2021 and you have an unadjusted trial balance (Exhibit I). Not all 2020year-end journal entries have been made yet, but any unrecorded adjusting journal entries can befound in Exhibit II.

1) Prepare a memo summarizing the main or key changes to between CSRS 4200 (compilation report) and Section 9200 (notice to reader) and how they may affect the Tim's Party engagement in the following areas: a. Scope b. Engagement acceptance and continuance c. Performing the engagement (work effort) d. Describing the basis of accounting e. Communication f. Documentation Some information of the new report is posted in the Tim's Party Folder.

2) Are there any specific steps or procedures that we will need to do during the Tim's Party engagement based on your answer to Q1?

3) List any questions you have or further information you need to obtain from Tim based your work on the engagement to date.