You have just started working as a junior accountant for Suppan & Associates LLP, a mid-...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You have just started working as a junior accountant for Suppan & Associates LLP, a mid- size firm specializing in the audit of small retail and service companies. Just as you are finishing your review the firm's Quality Control Policies & Procedures Manual, one of the audit partners calls you into his office to discuss a prospective new audit engagement client: "Welcome to the firm. I hope you are getting adjusted by now! I just got a call this morning from Devi Devine, the owner of a chain of local dry-cleaning stores. She thinks her company will need an audit of its financial statements because they are seeking to borrow a large amount of money from the bank to upgrade their equipment to use the newer environmentally friendly processes. I have an appointment to meet her tomorrow morning and started making some notes about the points to cover at the meeting, but I have to run out right now to deal with a medical emergency. My son had a fall at soccer and needs to go to the hospital emergency clinic for stitches-we could be waiting around there all day and night! "Since you haven't yet been assigned to any work yet, can you finish up these notes for me so I'll be ready for tomorrow? Since this company has never been audited before, I want to be sure I explain to them what an independent financial statement audit is, why they may or may not need one, and what it will involve. I also want to make sure that I get all the information our firm needs to make a decision on whether we can accept the engagement. I have met the owner and her husband a few times at the local Chamber of Commerce meetings, and they seem to have a good reputation in the business community. It looks good, too, that they want to move to more environmentally friendly dry cleaning-I know many people are looking for that kind of service now due to allergies and other sensitivities. Here are the notes I've prepared so far (See below), so please expand on these points-I want to be sure to cover everything important at the meeting tomorrow. I know Devi is a very busy businesswoman." Required: Complete the "To do" points in the audit partner's draft meeting notes. Draft Notes for Meeting with Pristine Cleaners Inc. Owner, Devi Devine 1. Discuss the nature of an independent audit; determine whether it is needed. To do: List questions to ask Devi. 2. Summarize the audit process. To do: List what she can expect if an audit engagement is performed. 3. Determine whether professional and ethics codes will allow our firm to accept. To do: List the information we'll need to get from Devi to make this decision, and also other information we need from other sources. 4. Review the points to be covered in the overall audit strategy if we accept. You have just started working as a junior accountant for Suppan & Associates LLP, a mid- size firm specializing in the audit of small retail and service companies. Just as you are finishing your review the firm's Quality Control Policies & Procedures Manual, one of the audit partners calls you into his office to discuss a prospective new audit engagement client: "Welcome to the firm. I hope you are getting adjusted by now! I just got a call this morning from Devi Devine, the owner of a chain of local dry-cleaning stores. She thinks her company will need an audit of its financial statements because they are seeking to borrow a large amount of money from the bank to upgrade their equipment to use the newer environmentally friendly processes. I have an appointment to meet her tomorrow morning and started making some notes about the points to cover at the meeting, but I have to run out right now to deal with a medical emergency. My son had a fall at soccer and needs to go to the hospital emergency clinic for stitches-we could be waiting around there all day and night! "Since you haven't yet been assigned to any work yet, can you finish up these notes for me so I'll be ready for tomorrow? Since this company has never been audited before, I want to be sure I explain to them what an independent financial statement audit is, why they may or may not need one, and what it will involve. I also want to make sure that I get all the information our firm needs to make a decision on whether we can accept the engagement. I have met the owner and her husband a few times at the local Chamber of Commerce meetings, and they seem to have a good reputation in the business community. It looks good, too, that they want to move to more environmentally friendly dry cleaning-I know many people are looking for that kind of service now due to allergies and other sensitivities. Here are the notes I've prepared so far (See below), so please expand on these points-I want to be sure to cover everything important at the meeting tomorrow. I know Devi is a very busy businesswoman." Required: Complete the "To do" points in the audit partner's draft meeting notes. Draft Notes for Meeting with Pristine Cleaners Inc. Owner, Devi Devine 1. Discuss the nature of an independent audit; determine whether it is needed. To do: List questions to ask Devi. 2. Summarize the audit process. To do: List what she can expect if an audit engagement is performed. 3. Determine whether professional and ethics codes will allow our firm to accept. To do: List the information we'll need to get from Devi to make this decision, and also other information we need from other sources. 4. Review the points to be covered in the overall audit strategy if we accept.
Expert Answer:
Answer rating: 100% (QA)
1 To determine if an audit is necessary questions to ask Devi include What is the purpose of the loa... View the full answer
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
Posted Date:
Students also viewed these accounting questions
-
You have recently been hired as a junior accountant for a local PA firm. The firms main practice involves reviews, compilations, and tax return preparation for small to medium business clients. The...
-
The following audit procedures were performed in the audit of inventory to satisfy specific balance-related audit objectives as discussed in Chapter 6. The audit procedures assume that the auditor...
-
The following auditing procedures were performed in the audit of accounts payable: 1. Obtain a list of accounts payable. Re-add and compare with the general ledger. 2. Trace from the general ledger...
-
Suppose treacle is an array of 10 floats. Declare a pointer that points to the first element of treacle and use the pointer to display the first and last elements of the array.
-
Electronic marketing has raised several ethical questions related to consumer privacy. How can cookies be misused? Should the government regulate the use of cookies by marketers?
-
What are the key principles underlying the design and operation of multiphase reactors for the synthesis of fine chemicals, and how do they impact overall reaction kinetics and selectivity? Explain
-
For each of the following situations, calculate the degrees of freedom \((d f)\), identify the critical values (assume \(\mathrm{a}=.05\) [two-tailed]), calculate the \(t\)-statistic \((t)\), make a...
-
1. What is the difference between rules-based and principles-based accounting standards, and what are the advantages and disadvantages of each? 2. Why has U.S. GAAP evolved into a rules-based...
-
Bank Town Limited (BTL) is a small but growing financial institution. Bank Town Ltd is a relatively new company and they are seeking funds to expand their range of financial products to be offered to...
-
XYZ is a calendar-year corporation that began business on January 1, 2020. For the year, it reported the following information in its current-year audited income statement. Notes with important tax...
-
Research and Opportunity Identification: Identify industries and companies you are interested in. Research job openings and requirements in these areas. Resume and Cover Letter Preparation.
-
Analyze the strengths, weaknesses, opportunities, and threats relating to the issues of programmatic operations in homeland security. Provide references in APA format
-
Discuss product development in terms of both product and service development i.e differences and similarities. What's the MVP (Minimum Viable Product) concept in product/service development and how...
-
To evaluate the corporate strategy for BP and Uber. For each company, answer question (1) and the relevant question from (2) to (5). Explain what vertical integration is and provide some evidence in...
-
Identify how the sentences in the passage are arranged. The supervisor is out sick. You will take their place and chair the team meeting later. This question requires you to outline one (1) correct...
-
Below is the task 1 and 2 please explain it as according to scenario: The management hires six candidates to work overseas because they did not feel that the other candidates were qualified. They...
-
Suppose that the mortgage balance at the beginning of January 2018 is $4,500 million, the SMM is 0.006 (or 0.6%), and the scheduled principal repayment is $80 million. What is the estimated...
-
Government is advised to tax goods whose demand curves are inelastic if the goal is to raise tax revenues. If the goal is to discourage consumption, then it ought to tax goods whose demand curves are...
-
Why do you think companies use revenue recognition as a primary means for inflating profits?
-
How do the management assertions relate to the objectives of attributes sampling?
-
In the most recent local election between two candidates, you heard your local news anchor indicate that your preferred candidate had 48 percent of the vote with a margin for error (precision) of 6 6...
-
Suppose a species of bacteria divides once every 20 minutes. You start with a single bacterium on your unrefrigerated egg-and-baloney sandwich at 8:00 am. Show that when you sit down to lunch at...
-
The lightest and heaviest flying birds are the bee hummingbird of Cuba, which weighs about 1.6 grams, and the great bustard of Europe and Asia, which can weigh as much as 21 kilograms. Show that the...
-
What is a chemoautotroph? What does a chemoautotroph have in common with a plant? How does a chemoautotroph differ from a plant in how it obtains food?
Study smarter with the SolutionInn App