A Western nutrition company owns three large Florida citrus-fruit farms. Each farm produces oranges and grapefruit...

Transcribed Image Text:

A Western nutrition company owns three large Florida citrus-fruit farms. Each farm produces oranges and grapefruit that are graded (1) to be sold to grocery store chains, (2) to be sold for fruit juice to food processing companies, and (3) to be used in the production of natural vitamins by the parent company in its Western facilities. The three farms are managed under a central management team the includes a "farm manager," An accountant who is an assistant controller to the company controller, and a marketing and transportation specialist in charge of selling and shipping the fruit. These three members of the management team live in Florida and have offices in Orlando. In addition, each farm has an overseer who is directly responsible for the operation of his farm. All of the three overseers have homes on the farm properties where they live with their families. While some of each year's crop is harvested by machine, each farm continues to employ Migrant workers during the harvest season. The overseers also have sizable truck farms where they harvest fruits and vegetables for their own families and for the families of the management team. Excess produce from these truck farms is sold to local grocery stores in Orlando. Each farm overseer is allowed to keep any proceeds from these sales to augment income from the company fruit farms. A team of auditors has been assigned to audit the farm operations and the recordkeeping system. Required: A. Plan a preliminary survey for this audit outlining in general what could be expected from each step in the preliminary survey. A Western nutrition company owns three large Florida citrus-fruit farms. Each farm produces oranges and grapefruit that are graded (1) to be sold to grocery store chains, (2) to be sold for fruit juice to food processing companies, and (3) to be used in the production of natural vitamins by the parent company in its Western facilities. The three farms are managed under a central management team the includes a "farm manager," An accountant who is an assistant controller to the company controller, and a marketing and transportation specialist in charge of selling and shipping the fruit. These three members of the management team live in Florida and have offices in Orlando. In addition, each farm has an overseer who is directly responsible for the operation of his farm. All of the three overseers have homes on the farm properties where they live with their families. While some of each year's crop is harvested by machine, each farm continues to employ Migrant workers during the harvest season. The overseers also have sizable truck farms where they harvest fruits and vegetables for their own families and for the families of the management team. Excess produce from these truck farms is sold to local grocery stores in Orlando. Each farm overseer is allowed to keep any proceeds from these sales to augment income from the company fruit farms. A team of auditors has been assigned to audit the farm operations and the recordkeeping system. Required: A. Plan a preliminary survey for this audit outlining in general what could be expected from each step in the preliminary survey.

Answer rating: 100% (QA)

The preliminary survey is an essential first step in the audit process It involves gathering information about the operations systems and controls of ... View the full answer