Sander Persaud is an audit manager for a national public accounting firm. Each summer, the firm recruits several university students as interns. One such intern is Milton Kidd, a high- performing student who has just finished his third year of university and who is majoring in accounting.

As a test of Milton’s understanding of accounting, Sander has assigned him the task of reviewing three of the firm’s recently acquired clients. Sander has asked Milton to give him a report in which he points out any significant differences between the three clients and the implications of those differences for the clients’ financial reporting, with a ranking of importance for each client. He wants the report on his desk by the end of the day. Brief descriptions of the new clients are as follows:

IAP is a private, family- owned company that has a significant level of debt financing through investment funds and, to a lesser extent, through Canadian and U. S. banks. How-ever, the owners recognize that to continue expansion through acquisitions, they will need to tap the public financial markets. An IPO (initial public offering) is definitely an expectation within another two or three years, depending on the state of the market. IAP plans to apply for a listing on the Toronto Stock Exchange in conjunction with an IPO.

Required:

Assume that you are Milton Kidd. Prepare the report for Sander Persaud.