Mr. Smith's small consulting firm specializes in providing internal control advice to his clients. All of his staff are certified internal auditors (CIAS) and want to gain expertise in a variety of industries. Jonas, his most senior consultant, always brings a less-seasoned associate with him for efficiency, training, and general camaraderie. Jonas first assesses a situation in about 4 hours and then will brainstorm ideas the client could use to address its internal control risks. The less-seasoned associate follows Jonas, listens to the half-day assessment ritual, and then helps to brainstorm improvements for the client. Jonas's labor rate is billed at $100/hour, while the associate's billing rate is half that amount. (a) Mr. Smith believes Jonas operates on a 70% learning curve for the "assessment" portion of his work, while his associate operates on a 75% learning curve. Create a chart outlining the number of hours each of these individuals is likely to spend on the next assessment of a client's internal controls. How much time will Mr. Smith expect each of them to spend on their fourth such assessment of a client's internal controls? (Round answers to 2 decimal places, e.g. 15.25.) Time spent on the fourth assessment Jonas hours Jonas' associate hours
Mr. Smith's small consulting firm specializes in providing internal control advice to his clients. All of his staff are certified internal auditors (CIAS) and want to gain expertise in a variety of industries. Jonas, his most senior consultant, always brings a less-seasoned associate with him for efficiency, training, and general camaraderie. Jonas first assesses a situation in about 4 hours and then will brainstorm ideas the client could use to address its internal control risks. The less-seasoned associate follows Jonas, listens to the half-day assessment ritual, and then helps to brainstorm improvements for the client. Jonas's labor rate is billed at $100/hour, while the associate's billing rate is half that amount. (a) Mr. Smith believes Jonas operates on a 70% learning curve for the "assessment" portion of his work, while his associate operates on a 75% learning curve. Create a chart outlining the number of hours each of these individuals is likely to spend on the next assessment of a client's internal controls. How much time will Mr. Smith expect each of them to spend on their fourth such assessment of a client's internal controls? (Round answers to 2 decimal places, e.g. 15.25.) Time spent on the fourth assessment Jonas hours Jonas' associate hours
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Mr. Smith's small consulting firm specializes in providing internal control advice to his clients. All of his staff are certified
internal auditors (CIAS) and want to gain expertise in a variety of industries. Jonas, his most senior consultant, always brings a
less-seasoned associate with him for efficiency, training, and general camaraderie. Jonas first assesses a situation in about 4
hours and then will brainstorm ideas the client could use to address its internal control risks. The less-seasoned associate
follows Jonas, listens to the half-day assessment ritual, and then helps to brainstorm improvements for the client. Jonas's
labor rate is billed at $100/hour, while the associate's billing rate is half that amount.
(a)
Mr. Smith believes Jonas operates on a 70% learning curve for the "assessment" portion of his work, while his associate
operates on a 75% learning curve. Create a chart outlining the number of hours each of these individuals is likely to spend
on the next assessment of a client's internal controls. How much time will Mr. Smith expect each of them to spend on
their fourth such assessment of a client's internal controls? (Round answers to 2 decimal places, e.g. 15.25.)
Time spent on the fourth assessment
Jonas
hours
Jonas' associate
hours
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