Dry Quick (DQ) is a medium-sized, private manufacturing company located near Timmins, Ontario. DQ has a June 30 year-end. The Chief Financial Officer (CFO) believed DQ had outgrown its audit firm and asked your firm, Poivre & Sel (P&S), to perform the annual audit. It is now August 2, 2010. P&S performed the necessary client acceptance procedures and is currently working on the year-end audit of DQ. However, the senior on the engagement has recently become ill and will be unable to complete the file. You, CA, have been asked to take over the senior role on the audit. The following information has been provided to help you familiarize yourself with the client: information on DQ (Exhibit I), a draft income statement prepared by management in accordance with Canadian Generally Accepted Accounting Principles (GAAP) (Exhibit II), notes from your firm’s meetings with management and the Board Chair (Exhibit 111), and excerpts from the current year audit file (Exhibit IV).
The following week, the audit partner on the file calls you into his office, “Now that you’ve had the audit file for a week, can you let me know what issues you’ve identified and what is left to be done, including a list of outstanding audit procedures. In addition, the Board Chair is curious to see what our management letter is likely to contain, so please prepare a first draft for me.”
Attachments:
Dry-Quick-UFE….pdf
Untitled-1.odt