Term Paper- Explain why the interest rate for the loan that requires a review report is lower than that for the loan that did not require a review. Explain why the interest rate for the loan that requires an audit report is lower than the interest rate for the other two loans.

Term Paper- Explain why the interest rate for the loan that requires a review report is lower than that for the loan that did not require a review. Explain why the interest rate for the loan that requires an audit report is lower than the interest rate for the other two loans.

a. Explain why the interest rate for the loan that requires a review report is lower than that for the loan that did not require a review. Explain why the interest rate for the loan that requires an audit report is lower than the interest rate for the other two loans.

 

b. Calculate Busch Corporations annual costs under each loan agreement, including interest and costs for the CPA firm’s services. Indicate whether Busch should keep its existing loan, accept the offer from United National bank, or accept the offer from First City Bank.

C. Assume that United National Bank has offered the loan at rate of 4.5% with a review, and the cost of the audit has increased to $*0,000 due to new auditing standards re requirements. Indicate whether Busch should keep its existing loan, accept the offer from United National Bank, or accept the offer from First City Bank

d. Discuss why Busch may desire to have an audit, ignoring the potential reduction in interest costs.

c. Explain how a strategic understanding of the clients business may increase the value of the audit service.