It is Monday, September 16, 2013. You, CA, work at Fahmy & Gingras LLP, a CA ï¬rm.
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It seems there have been substantial changes at BSL this year, Ken explains. Im going there tomorrow, and since you will be on the audit again this year, it would be beneï¬cial for you to come. I took the liberty of retrieving information from last years ï¬les so you can refresh your memory about this client (Exhibit C5-1(a)).
The next day, you and Ken meet with Jack Wright, the accounting manager at BSL. Jack gives you the internally prepared ï¬nancial statements. To your surprise, there are also ï¬nancial statements for two new companies. Jack quickly explains that BSL incorporated two subsidiaries in January 2013, each with the same year end as BSL:
Brennan Transport Ltd. (Transport) - 100% owned by BSL
Brennan Fuel Tank Installations Inc. (Tanks) - 75% owned by BSL
You diligently take notes during the meeting. Jack states that BSL will prepare consolidated ï¬nancial statements for audit based on Canadian Generally Accepted Accounting Principles (GAAP) to satisfy the banks request.
Ken asks that you work on the overall planning for these engagements. As part of your planning, he asks you to discuss the new accounting issues that arise as a result of the changes during the year and to evaluate their implications for the engagements.
Later that day, Ken also forwards you an email from Jack.
Required
Prepare the report requested by Ken.
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