The financial statements for public companies are available through the website SEDAR (www.sedar.com). This is the official site that provides access to information filed by public companies and investment funds with the CSA. The objective in making public this financial information is to enhance investor awareness of the business and affairs of public companies, and to promote confidence in the operation of capital markets in Canada. Achieving this objective relies heavily on the provision of accurate information on market participants.
Required
Go to www.sedar.com and select the most recent set of audited annual financial statements for a Canadian public company. Using this set of financial statements, answer the following:
(a) When planning the audit, the auditor needs to gain an understanding of the entity's structure and its business environment. To do this, the auditor focuses on identifying potential risks that may have a significant effect on the financial statements. Prepare a memo for the audit planning file and discuss the entity, industry, and economy-level factors that the auditor should consider to plan the audit for this entity.
(b) Review the financial statement notes. Are there any related parties? If so, who are the related parties? Are there many or just a few? What is disclosed in the related party note? What impact will this have on the auditor's preliminary risk assessment?
(c) With the information provided, discuss the entity's ability to continue as a going concern using the going concern indicators discussed in this chapter.