Question

Greenbloom Garden Centers is a small, privately held corporation that has two stores in Orlando, Florida. The Greenbloom family owns 100 percent of the company‚Äôs stock, and family members manage the operations. Sales at the company‚Äôs stores have been growing rapidly, and there appears to be a market for the company‚Äôs sales concept‚ÄĒproviding bulk garden equipment and supplies at low prices. The controller prepares the company‚Äôs financial statements, which are not audited. The company has no debt but is considering expanding to other cities in Florida. Such expansion may require long- term borrowings and is likely to reduce the family‚Äôs day- to-day control of the operations. The family does not intend to sell stock in the company.

Required:
Discuss the factors that may make an audit necessary and potentially valuable for the company. Be sure to consider the concept of information risk.



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  • CreatedSeptember 22, 2014
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