Question

Goal Products Limited (GPL) is the official manufacturer and distributor of soccer balls for the North American League Soccer (NALS), a professional soccer association. GPL was founded 15 years ago and became a Canadian publicly traded company on July 1, 20X1. GPL has one plant in Canada, and it has one in the U.S. that is operated through a subsidiary of GPL.
It is now October 20, 20X3. You, PA, were recently hired as the manager of financial reporting for GPL. In your first week, you must review the first draft of the quarterly reporting package and provide comments to the financial reporting team on any issues you note. As you start your review you receive an email from the chief financial officer,
Joey Bonaducci (Exhibit DC16-6 –1).
EXHIBIT DC16-6–1
Email from Joey Bonaducci
Hi PA, before you start on reviewing the quarterly reporting packages, we need to prepare a response to the management letter we received from the external auditors for the year ended June 30, 20X3, for presentation at the next audit committee meeting next week. Sandra Dee, who is responsible for GPL’s internal audit work among her many other duties, has looked into the issues and prepared our responses (Exhibit DC16-6–2). Please review the draft report prepared by Sandra and make sure the auditors will be satisfied with our response.
Joey B.




Required:
a. Take on the role of PA in the case, and comment on the general process being used by GPL to prepare the responses to the external auditor’s management letter and bring them to the audit committee.
b. In the role of PA in the case, assess the adequacy of the internal auditor’s work and responses. State your conclusions on whether Sandra’s responses will be satisfactory to the external auditor.
c. Take the role of the external auditor in the case. Discuss what impact the weaknesses, if not addressed, will have on planning the audit engagement for nextyear.


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  • CreatedJanuary 09, 2015
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