Question: Fellowes and Associates Chartered Professional Accountants is a successful national accounting firm with a large range of clients across Canada. In 2020, Fellowes and Associates

Fellowes and Associates Chartered Professional Accountants is a successful national accounting firm with a large range of clients across Canada. In 2020, Fellowes and Associates gained a new client, Health Care Holdings Group (HCHG), which owns 100 percent of the following entities:

• Shady Oaks Centre, a private treatment centre

• Gardens Nursing Home Ltd., a private nursing home

• Total Laser Care Limited (TLCL), a private clinic that specializes in the laser treatment of skin defects Year end for all HCHG entities is June 30.

TLCL owns two relatively old laser machines used in therapy. Recently, staff using these machines have raised concerns that they have adverse impacts on patients.

TLCL wishes to purchase a new, more technologically advanced machine. The Ministry of Health has agreed to fund half the purchase price on the basis that TLCL follows the ministry’s “Guidelines for Procurement of Medical Equipment” when purchasing the machine. The Ministry of Health has engaged the provincial Auditor General to check that TLCL has met the terms of the funding agreement.


Required

Discuss the relevant criteria against which the Auditor General will check TLCL’s compliance with the terms of the funding agreement.

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