Canterlot Chartered Accountants is a successful mid-tier accounting firm with a large range of clients across Australia. During the 2020
Canterlot Chartered Accountants is a successful mid-tier accounting firm with a large range of clients across Australia. During the 2020 year, Canterlot gained a new client, Cloudsdale Medical Group (CMG), which owns 100 per cent of the following entities:
• Everfree Forest Hospital, a private hospital group
• Calendula Care Pty Ltd, a private nursing home
• Tempo Cancer Treatment Limited (TCTL), a private oncology clinic that specialises in the treatment of cancer.
Year-end for all CMG entities is 30 June.
TCTL owns two relatively old linear accelerators used in radiation therapy. Recently, radiographers using these linear accelerators have raised concerns that they have adverse radiation effects on patients.
TCTL also wishes to purchase a new, more technologically advanced linear accelerator. The Department of Health funded half the purchase price on the basis that TCTL followed the Department’s ‘Guidelines for procurement of medical equipment’ when purchasing the accelerator. The Department of Health has engaged the Auditor-General to check that TCTL met the terms of the funding agreement.
The Auditor-General has also been asked to conduct a performance audit that examines how well hospitals manage waste. Hospitals generate significant amounts of waste, both general and clinical. General waste is not dangerous and can be disposed of more cheaply than clinical waste.
Five years ago, the federal government measured the amount of hospital waste produced in terms of quantity and cost of disposal. The government then set an objective for hospitals to improve how they manage waste and published a document titled ‘Waste management guidelines’.
The aims of the Auditor-General’s performance audit include assessing whether:
1. Improvements have occurred
2. Hospitals have reduced the amount of waste produced
3. Hospitals have reduced the cost of waste disposal.
The Auditor-General’s preliminary findings indicate that many hospitals do not have processes for segregating general and clinical waste. These hospitals treat all waste as clinical waste.
(a) Discuss the relevant criteria against which the Auditor-General will check TCTL’s compliance with the terms of the funding agreement.
(b) Identify two criteria the Auditor-General can use to examine how well hospitals manage waste.
This problem has been solved!
Step by Step Answer: