Based on the facts as outlined in the case attached, in your own words provide a preliminary
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Based on the facts as outlined in the case attached, in your own words provide a preliminary report to the chief internal auditor at PPC and the owners of PPW identifying and assessing:
1- any internal control concerns and recommending areas where additional work may be necessary ( must include analysis of issues, internal audit response a d action plan for PPW).
2- relevant accounting issues.
Transcribed Image Text:
Page 1 of 4 PLEASANT PASTA WINDSOR INC. You, CPA, have just started in the internal audit department of Pleasant Pasta Corporation (PPC) after obtaining your CPA designation. PPC is a national grocery store chain. Your first assignment relates to one of PPC's franchisees, Pleasant Pasta Windsor Inc. (PPW). PPW opened in 20X0 as a full service grocery store in the suburbs of Windsor, Ontario. You met with your supervisor at PPC, Justin Trump, on February 1, 20X2. You were advised that your next assignment, at the end of that week, was to visit PPW with the objective of assessing the accounting policies it has adopted and the controls, including IT controls, it has implemented. This review of accounting policies and internal controls is part of the services provided to franchisees by PPC as part of the ongoing franchise relationship. Following your visit, you are to prepare a preliminary report to the Chief Internal Auditor at PPC and PPW management identifying any internal control concerns and recommending areas where additional work may be necessary. When PPW was advised you would be visiting, it requested that you identify accounting considerations for its current fiscal year to help it prepare for its first external audit. Therefore, your report should include your evaluation of the accounting issues for PPW as well. At the meeting, Justin provided you with preliminary information about PPW. PPW has only one bookkeeper and is managed by the owners, Sara and Craig Gamache. Sara and Craig each own 50% of the common shares of PPW and the company qualifies for the small business deduction for income tax purposes. Based on an analysis of PPW's internal monthly financial statements at December 31, 20X1, total sales for the fiscal year ended March 31, 20X2 are expected to reach $4.4 million. PPW adopted Canadian Accounting Standards for Private Enterprises (ASPE) as of April 1, 20X0. You spent two days - February 3 and 4, 20X2-at PPW obtaining information and conducting preliminary testing. The information you obtained during your visit is summarized in Exhibit 1. Page 1 of 4 PLEASANT PASTA WINDSOR INC. You, CPA, have just started in the internal audit department of Pleasant Pasta Corporation (PPC) after obtaining your CPA designation. PPC is a national grocery store chain. Your first assignment relates to one of PPC's franchisees, Pleasant Pasta Windsor Inc. (PPW). PPW opened in 20X0 as a full service grocery store in the suburbs of Windsor, Ontario. You met with your supervisor at PPC, Justin Trump, on February 1, 20X2. You were advised that your next assignment, at the end of that week, was to visit PPW with the objective of assessing the accounting policies it has adopted and the controls, including IT controls, it has implemented. This review of accounting policies and internal controls is part of the services provided to franchisees by PPC as part of the ongoing franchise relationship. Following your visit, you are to prepare a preliminary report to the Chief Internal Auditor at PPC and PPW management identifying any internal control concerns and recommending areas where additional work may be necessary. When PPW was advised you would be visiting, it requested that you identify accounting considerations for its current fiscal year to help it prepare for its first external audit. Therefore, your report should include your evaluation of the accounting issues for PPW as well. At the meeting, Justin provided you with preliminary information about PPW. PPW has only one bookkeeper and is managed by the owners, Sara and Craig Gamache. Sara and Craig each own 50% of the common shares of PPW and the company qualifies for the small business deduction for income tax purposes. Based on an analysis of PPW's internal monthly financial statements at December 31, 20X1, total sales for the fiscal year ended March 31, 20X2 are expected to reach $4.4 million. PPW adopted Canadian Accounting Standards for Private Enterprises (ASPE) as of April 1, 20X0. You spent two days - February 3 and 4, 20X2-at PPW obtaining information and conducting preliminary testing. The information you obtained during your visit is summarized in Exhibit 1.
Expert Answer:
Answer rating: 100% (QA)
ANSWER Internal control definition internal control as defined by the Committee of Sponsoring Organizations of the Treadway Commission COSO is a process affected by an entitys board of directors trust... View the full answer
Related Book For
South western Federal Taxation 2017 Essentials of Taxation Individuals and Business Entities
ISBN: 9780357109144
20th edition
Authors: William A. Raabe, David M. Maloney, James C. Young, Annette Nellen
Posted Date:
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