P7–17 Using the free cash flow valuation model to price an IPO Assume that you have an
opportunity to buy the stock of CoolTech, Inc., an IPO being offered for $12.50 per
share. Although you are very much interested in owning the company, you are concerned
about whether it is fairly priced. To determine the value of the shares, you
have decided to apply the free cash flow valuation model to the firm’s financial data
that you’ve developed from a variety of data sources. The key values you have compiled
are summarized in the following table.
Free cash flow
Year (t) FCFt Other data
2016 $ 700,000 Growth rate of FCF, beyond 2019 to infinity 5 2%
2017 800,000 Weighted average cost of capital 5 8%
2018 950,000 Market value of all debt 5 $2,700,000
2019 1,100,000 Market value of preferred stock 5 $1,000,000
Number of shares of common stock outstanding 5 1,100,000
a. Use the free cash flow valuation model to estimate CoolTech’s common stock
value per share.
b. Judging on the basis of your finding in part a and the stock’s offering price,
should you buy the stock?
c. On further analysis, you find that the growth rate in FCF beyond 2019 will be
3% rather than 2%. What effect would this finding have on your responses in
parts a and b?
In: Finance
- Where is the smartness incorporated in the Internet?
- What is the Internet end-to-end principal?
- What do you think are the main trade-offs of this end-to-end principal that you just described?
Please explain in detail, I am so confused. This is a Critical Thinking Essay Question For Network Architecture.
In: Computer Science
Name and describe the 5 types of slavery found around the globe today.
In: Psychology
Kohler Corporation reports the following components of
stockholders’ equity at December 31, 2018.
Common stock—$15 par value, 100,000 shares authorized, 55,000 shares issued and outstanding |
$ | 825,000 | |
Paid-in capital in excess of par value, common stock | 60,000 | ||
Retained earnings | 400,000 | ||
Total stockholders' equity | $ | 1,285,000 | |
During 2019, the following transactions affected its stockholders’ equity accounts.
Jan. | 2 | Purchased 5,500 shares of its own stock at $20 cash per share. | ||
Jan. | 5 | Directors declared a $4 per share cash dividend payable on February 28 to the February 5 stockholders of record. | ||
Feb. | 28 | Paid the dividend declared on January 5. | ||
July | 6 | Sold 2,063 of its treasury shares at $24 cash per share. | ||
Aug. | 22 | Sold 3,437 of its treasury shares at $17 cash per share. | ||
Sept. | 5 | Directors declared a $4 per share cash dividend payable on October 28 to the September 25 stockholders of record. | ||
Oct. | 28 | Paid the dividend declared on September 5. | ||
Dec. | 31 | Closed the $388,000 credit balance (from net income) in the Income Summary account to Retained Earnings. |
Required:
1. Prepare journal entries to record each of these
transactions.
2. Prepare a statement of retained earnings for
the year ended December 31, 2019.
3. Prepare the stockholders’ equity section of the
company’s balance sheet as of December 31, 2019.
In: Accounting
1) Smith & Jones has been asked by Levi Manufacturing to quote on a 4-year lease for a machine which costs $375,000. The equipment can be depreciated for tax purposes over 4 years.
The equipment has a residual value expected to be $15,000 to be received at the end of the lease period which is taxed at the corporate tax rate.
Other details:
Company's Cost of Capital 10%
Corporate Tax Rate 30%
All lease payments are received in advance, at the start of the year - (annuity due).
Required:
What is the ANNUAL LEASE PAYMENT that Smith and Jones should quote Levi Manufacturing?
2) Johnny Johnson commenced worked at the Jenson Laboratories on the 15th June 1994. He is currently earning currently earning $76,500 per year.
Long service leave entitlement is calculated as 10 weeks leave after the first 10 years of service and 10 calendar days for every year worked in excess of 10 years (proportionate leave for partial year)
Required:
As at 31st May 2017, calculate the amount of money owing to Johnny for his Long Service Leave entitlement.
In: Accounting
Wagner Industries is comparing two different capital structures. Plan I would result in 9,500 shares of stock and $361,000 in debt. Plan II would result in 12,000 shares of stock and $238,000 in debt. The interest rate on the debt is 10 percent.
a. Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $71,000. The all-equity plan would result in 19,000 shares of stock outstanding. Which of these three plans has the highest EPS? The lowest?
b. In question (1), what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? Is one higher than the other? Why?
c. Ignoring taxes, when will EPS be identical for Plans I and II?
In: Finance
In: Operations Management
The strategy of the courtroom is a subtle thing. Common sense
would say that a criminal who admits guilt is treated more
leniently while a defiant criminal gets a harsher sentence. To see
if this is actually true, data was gathered from criminal courts to
determine if criminals who plead guilty receive lighter sentences
than those who plead guilty.
Variables:
a) sentence: Sentence Length (in months).
b) served: Actual sentence served (in months).
c) plea: either a not guilty plea or a guilty plea.
Sentence Served Plea
24 8.75 Not Guilty
33.5 6.5 Not Guilty
25.5 6.5 Gulity
18 12.5 Not Guilty
18.5 11 Gulity
44.5 14.5 Not Guilty
38.5 20 Not Guilty
50.5 22 Not Guilty
12.5 1 Gulity
102 10.75 Gulity
30 1.5 Gulity
Perform a two sample t-test to compare the sentences served by
those who plead guilty and those who do not.
State and address all of the assumptions required for the
t-test.
Use boxplots to illustrate your data, and describe how they relate
to your results.
Do criminals who plead guilty get more lenient treatment than those
that plead not guilty? As much as possible, relate your comments to
specific results.
In: Math
Southwestern Wear Inc. has the following balance sheet:
Current assets | $1,875,000 | Accounts payable | $375,000 | |
Fixed assets | 1,875,000 | Notes payable | 750,000 | |
Subordinated debentures | 750,000 | |||
Total debt | $1,875,000 | |||
Common equity | 1,875,000 | |||
Total assets | $3,750,000 | Total liabilities and equity | $3,750,000 |
The trustee's costs total $323,500, and the firm has no accrued taxes or wages. Southwestern has no unfunded pension liabilities. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will each class of investors receive if a total of $4 million is received from sale of the assets?
Distribution of proceeds on liquidation:
1. Proceeds from sale of assets | $ ___ | |
2. First mortgage, paid from sale of assets | $ ___ | |
3. Fees and expenses of administration of bankruptcy | $ ___ | |
4. Wages due workers earned
within 3 months prior to filing of bankruptcy petition |
$ ___ | |
5. Taxes | $ ___ | |
6. Unfunded pension liabilities | $ ___ | |
7. Available to general creditors | $ ___ |
Distribution to general creditors:
Claims of General Creditors | Claim (1) |
Application of 100%
Distribution (2) |
After Subordination
Adjustment (3) |
Percentage of Original Claims
Received (4) |
Notes payable | $ ___ | $ ___ | $ ___ | %___ |
Accounts payable | $___ | $ ___ | $ ___ | %___ |
Subordinated debentures | $ ___ | $ ___ | $ ___ | %___ |
Total | $ ___ | $ ___ | $ ___ |
The remaining $______ will go to the common stockholders.
In: Finance
Assessment item 3
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Case B - Report
Value: 20%
Due Date: 16-Sep-2018
Return Date: 05-Oct-2018
Length: 3000 words
Submission method options: Alternative submission method
Task
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Background
You are a manager in the audit division at Miller Yates Howarth (MYH), an accounting firm with offices throughout the major regional centres of NSW and Queensland. Although a medium sized firm by national standards, MYH is the second largest regional accounting firm in Australia. Most of MYH’s audit clients are in the agriculture, mining, manufacturing and property industries. All those industries are currently under pressure, either from a downturn in commodity prices or fierce competition from overseas competitors. Ratios extracted from an unaudited set of financial reports at 30 June 2018 together with audited comparatives for the year ended 30 June 2017 and 2016 are set out below for your review.
You are gathering information to prepare the audit plan of Trunkey Creek Wines Limited for the year ended 30 June 2018. Trunkey Creek Wines (TCW) is one of MYH’s most significant and longstanding clients. The following information has been gathered to date.
Principal activities of TCW
• growing grapes for wine production;
• production and distribution of red, white and sparkling wines;
• beef cattle production on land surplus to grape production; and
• investment of surplus funds.
TCW was originally a family company incorporated in 1968 and has operated successfully and profitably since that date. In the 1990’s shares were sold to a small number of investors to increase funds for the development and upgrading of the winery and the purchase of additional land for the vineyards. Insufficient rainfall had meant that some land was no longer suitable for wine grape production, as a result, TWC moved into Wagyu beef cattle production on this surplus land. The Wagyu operation is now starting to return a profit.
TWC now find that the 2 degrees increase in temperature at some vineyards is affecting the production of sparkling wine and are now looking at purchasing land in cooler climates. TWC has built up a strong following for their sparkling wine which earns significant profits in both domestic and overseas markets. TWC are currently negotiating the land purchase and part funding in part from medium term bank loans. The remaining purchase price will be sourced from surplus funds.
The Wagyu beef is sold through the Wagyu Selling Group (WSG) in which TWC has shares. These shares form a material part of TWC’s investment portfolio. WSG buys, butchers and sells the Wagyu beef to high end domestic restaurants and regularly sends frozen shipments to Japan and China. TWC are heavily marketing their pinot, both domestically and overseas, as a perfect accompaniment to the Wagyu beef.
The directors of TCW are:
Mrs Claire Harewood, Chairman. Mrs Harewood has significant experience in the industry and replaced her husband as chair when he died 10 years ago.
Mr Phillip Strange, Chief Executive Officer
Mr. Joe Quade
Mr Steven Harewood, son of Claire Harewood and has oversight of the Wagyu beef operation
Dr Mary Owens
Ms Hilary Jones
Mr Geoffrey Owens
Your audit partner, John Richards, has approached you and advised that there are several areas he is concerned about and he wants to you to report back to him about these areas before you complete your audit program. These areas and accounts are:
• Accounts receivable
• Investments
• Property assets
• Marketing expense
Ratio |
2018 (Unaudited) |
2017 (Audited) |
2016 (Audited) |
Return on equity % |
10.8 |
17.5 |
15.2 |
Return on beef production assets % |
1.67 |
-0.82 |
-3.45 |
Return on grape and wine production assets % |
12.2 |
14.5 |
16.2 |
Gross margin % |
24.5 |
30 |
31.76 |
Net profit margin % |
14.38 |
20.27 |
17.85 |
Marketing expense % of total S & A expenses |
23.67 |
17.89 |
15.2 |
Times interest earned |
6.67 |
7.51 |
8.1 |
Days in inventory - wine |
367 |
423 |
460 |
Days in accounts receivable - wine |
50.2 |
60.65 |
53.24 |
Days in accounts receivable - beef |
57 |
36 |
24 |
Current ratio:1 |
2.8 |
2.54 |
2.66 |
Quick asset ratio:1 |
1.18 |
1.15 |
1.2 |
Debt to equity ratio:1 |
0.54 |
0.63 |
0.67 |
Internal control
The financial controller at TCW has been refining the system of internal controls and informs you, at the planning stage of the current year's audit, that he has put together an internal control manual for the company. He has stated that this manual will create greater awareness of controls in the company, particularly with management which, in the past, has not been overly conscious of the need to implement and enforce effective internal controls.
Management staff receive bonuses based on certain agreed-upon target ratios which include measures such as targeted monthly sales volumes, variance of actual to budget departmental overheads and profit before interest and tax. The Board takes an active interest in the performance of the company and is quick to request explanations on variances from the agreed-upon monthly budgets.
Two years ago, the company devoted significant time and resources to the development and implementation of a new IT system. All teething problems associated with the implementation phase have now been resolved, and the financial controller is satisfied that the automated controls in place are assisting in producing accurate and complete accounting records. The management accountant also looks after the IT function as the position is not regarded by management as being a full-time job. Once application programs have been tested, strict password control exists over access to the programs. Passwords are not required for access to databases.
To assist in the planning for the current year's audit engagement, you extracted the following information from a review of the systems notes in the permanent file and a perusal of the new internal control manual:
There are three section managers, one each for grape production, wine production and beef production. Each can order supplies for their respective operations up to a limit of $10,000 for each order. Orders between $10,000 and $30,000 must be approved by the management accountant. Orders over $30,000 must be approved by the CEO. Orders over $50,000 must be approved by the Board.
Orders must be made through the computer ordering system which has direct links to the approved suppliers.
Supplier information is contained in a supplier master file. Each supplier has a unique supplier code. If a section manager orders from an unapproved supplier, the order is rejected and sent to the management accountant for approval.
The supplier information file is maintained by the accounts clerk. Changes to the file are approved manually by the management accountant.
When supplies are received at the winery, the storeman checks the supplies received to the online copy of the order and the delivery docket provided by the supplier. Any discrepancies are noted on the online copy of the order.
The delivery docket is filed by the storeman in a folder that is kept at the winery.
The invoice is received electronically from the supplier and matched to the order by the accounts clerk. If the order and the invoice match the invoice is included in a payments file.
The payments file is approved online by the management accountant once a week and used to generate an ABA file which is then uploaded to the bank by the management accountant.
When the payments file is approved by the management accountant, the invoice is automatically recorded as being paid in the accounting system.
When services such as repairs are ordered for the winery by the wine production manager, a service order is generated within the computer system and automatically sent to the service provider.
When the service has been delivered, the wine production manager or the storeman signs the service delivery docket on the service man’s tablet.
The invoice from the service company, with a copy of the signed service delivery docket, is received online by the accounts clerk.
The accounts clerk checks the signed service delivery docket to the invoice and the order and adds the invoice to the payments file for final approval by the management accountant.
In the case of discrepancies, the accounts clerk contacts the supplier and the wine production manager to resolve the issue. Payments are not made until the issue has been resolved.
Required
Write a report, including a brief executive summary, to your managing partner that addresses the questions below. Where indicated, use the required format to answer that question.
Question 1A 8%
Analyse the ratios and additional information associated with the four accounts listed by your audit partner, John Richards. Identify the potential audit risks and any audit steps that need to be undertaken to reduce audit risk.
Answer this question using the following table:
Accounts |
Analysis |
Audit Risk |
Audit steps to reduce risk |
Question 1B 2%
Analyse the ratios and additional information to outline business risks that TWC faces.
Question 2A 7%
Identify the internal controls in the system that are potentially effective, the risk that the control could alleviate and one test of control for each of the identified potentially effective controls.
Answer this question using the following headings:
Effective Control |
Risk alleviated |
Test of control |
Question 2B 2%
List and justify the weaknesses in internal control for purchases and accounts payable.
Weakness |
Justification |
Assessment item 3
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Case B - Report
Value: 20%
Due Date: 16-Sep-2018
Return Date: 05-Oct-2018
Length: 3000 words
Submission method options: Alternative submission method
Task
back to top
Background
You are a manager in the audit division at Miller Yates Howarth (MYH), an accounting firm with offices throughout the major regional centres of NSW and Queensland. Although a medium sized firm by national standards, MYH is the second largest regional accounting firm in Australia. Most of MYH’s audit clients are in the agriculture, mining, manufacturing and property industries. All those industries are currently under pressure, either from a downturn in commodity prices or fierce competition from overseas competitors. Ratios extracted from an unaudited set of financial reports at 30 June 2018 together with audited comparatives for the year ended 30 June 2017 and 2016 are set out below for your review.
You are gathering information to prepare the audit plan of Trunkey Creek Wines Limited for the year ended 30 June 2018. Trunkey Creek Wines (TCW) is one of MYH’s most significant and longstanding clients. The following information has been gathered to date.
Principal activities of TCW
• growing grapes for wine production;
• production and distribution of red, white and sparkling wines;
• beef cattle production on land surplus to grape production; and
• investment of surplus funds.
TCW was originally a family company incorporated in 1968 and has operated successfully and profitably since that date. In the 1990’s shares were sold to a small number of investors to increase funds for the development and upgrading of the winery and the purchase of additional land for the vineyards. Insufficient rainfall had meant that some land was no longer suitable for wine grape production, as a result, TWC moved into Wagyu beef cattle production on this surplus land. The Wagyu operation is now starting to return a profit.
TWC now find that the 2 degrees increase in temperature at some vineyards is affecting the production of sparkling wine and are now looking at purchasing land in cooler climates. TWC has built up a strong following for their sparkling wine which earns significant profits in both domestic and overseas markets. TWC are currently negotiating the land purchase and part funding in part from medium term bank loans. The remaining purchase price will be sourced from surplus funds.
The Wagyu beef is sold through the Wagyu Selling Group (WSG) in which TWC has shares. These shares form a material part of TWC’s investment portfolio. WSG buys, butchers and sells the Wagyu beef to high end domestic restaurants and regularly sends frozen shipments to Japan and China. TWC are heavily marketing their pinot, both domestically and overseas, as a perfect accompaniment to the Wagyu beef.
The directors of TCW are:
Mrs Claire Harewood, Chairman. Mrs Harewood has significant experience in the industry and replaced her husband as chair when he died 10 years ago.
Mr Phillip Strange, Chief Executive Officer
Mr. Joe Quade
Mr Steven Harewood, son of Claire Harewood and has oversight of the Wagyu beef operation
Dr Mary Owens
Ms Hilary Jones
Mr Geoffrey Owens
Your audit partner, John Richards, has approached you and advised that there are several areas he is concerned about and he wants to you to report back to him about these areas before you complete your audit program. These areas and accounts are:
• Accounts receivable
• Investments
• Property assets
• Marketing expense
Ratio
2018 (Unaudited)
2017 (Audited)
2016 (Audited)
Return on equity %
10.8
17.5
15.2
Return on beef production assets %
1.67
-0.82
-3.45
Return on grape and wine production assets %
12.2
14.5
16.2
Gross margin %
24.5
30
31.76
Net profit margin %
14.38
20.27
17.85
Marketing expense % of total S & A expenses
23.67
17.89
15.2
Times interest earned
6.67
7.51
8.1
Days in inventory - wine
367
423
460
Days in accounts receivable - wine
50.2
60.65
53.24
Days in accounts receivable - beef
57
36
24
Current ratio:1
2.8
2.54
2.66
Quick asset ratio:1
1.18
1.15
1.2
Debt to equity ratio:1
0.54
0.63
0.67
Internal control
The financial controller at TCW has been refining the system of internal controls and informs you, at the planning stage of the current year's audit, that he has put together an internal control manual for the company. He has stated that this manual will create greater awareness of controls in the company, particularly with management which, in the past, has not been overly conscious of the need to implement and enforce effective internal controls.
Management staff receive bonuses based on certain agreed-upon target ratios which include measures such as targeted monthly sales volumes, variance of actual to budget departmental overheads and profit before interest and tax. The Board takes an active interest in the performance of the company and is quick to request explanations on variances from the agreed-upon monthly budgets.
Two years ago, the company devoted significant time and resources to the development and implementation of a new IT system. All teething problems associated with the implementation phase have now been resolved, and the financial controller is satisfied that the automated controls in place are assisting in producing accurate and complete accounting records. The management accountant also looks after the IT function as the position is not regarded by management as being a full-time job. Once application programs have been tested, strict password control exists over access to the programs. Passwords are not required for access to databases.
To assist in the planning for the current year's audit engagement, you extracted the following information from a review of the systems notes in the permanent file and a perusal of the new internal control manual:
There are three section managers, one each for grape production,
wine production and beef production. Each can order supplies for
their respective operations up to a limit of $10,000 for each
order. Orders between $10,000 and $30,000 must be approved by the
management accountant. Orders over $30,000 must be approved by the
CEO. Orders over $50,000 must be approved by the Board.
Orders must be made through the computer ordering system which has
direct links to the approved suppliers.
Supplier information is contained in a supplier master file. Each
supplier has a unique supplier code. If a section manager orders
from an unapproved supplier, the order is rejected and sent to the
management accountant for approval.
The supplier information file is maintained by the accounts clerk.
Changes to the file are approved manually by the management
accountant.
When supplies are received at the winery, the storeman checks the
supplies received to the online copy of the order and the delivery
docket provided by the supplier. Any discrepancies are noted on the
online copy of the order.
The delivery docket is filed by the storeman in a folder that is
kept at the winery.
The invoice is received electronically from the supplier and
matched to the order by the accounts clerk. If the order and the
invoice match the invoice is included in a payments file.
The payments file is approved online by the management accountant
once a week and used to generate an ABA file which is then uploaded
to the bank by the management accountant.
When the payments file is approved by the management accountant,
the invoice is automatically recorded as being paid in the
accounting system.
When services such as repairs are ordered for the winery by the
wine production manager, a service order is generated within the
computer system and automatically sent to the service
provider.
When the service has been delivered, the wine production manager or
the storeman signs the service delivery docket on the service man’s
tablet.
The invoice from the service company, with a copy of the signed
service delivery docket, is received online by the accounts
clerk.
The accounts clerk checks the signed service delivery docket to the
invoice and the order and adds the invoice to the payments file for
final approval by the management accountant.
In the case of discrepancies, the accounts clerk contacts the
supplier and the wine production manager to resolve the issue.
Payments are not made until the issue has been resolved.
Required
Write a report, including a brief executive summary, to your managing partner that addresses the questions below. Where indicated, use the required format to answer that question.
Question 1A 8%
Analyse the ratios and additional information associated with the four accounts listed by your audit partner, John Richards. Identify the potential audit risks and any audit steps that need to be undertaken to reduce audit risk.
Answer this question using the following table:
Accounts
Analysis
Audit Risk
Audit steps to reduce risk
Question 1B 2%
Analyse the ratios and additional information to outline business risks that TWC faces.
Question 2A 7%
Identify the internal controls in the system that are potentially effective, the risk that the control could alleviate and one test of control for each of the identified potentially effective controls.
Answer this question using the following headings:
Effective Control
Risk alleviated
Test of control
Question 2B 2%
List and justify the weaknesses in internal control for purchases and accounts payable.
Weakness
Justification
In: Accounting
Consider a firm that exists for one period. The value of labour’s (L) marginal product is given by VMPL= P X MPL where P is the price of output, and MPL=10- 0.5L. The wage rate is $10.
a. Assuming that there are no hiring or training costs. If the firm expects the price of the output to be $10, what is the optimal level of employment L0? If the firm hires these workers, but then finds out that the price of output is $5, what will the firm do?
b. Assume now that there are hiring and training costs of $20 per worker. If the firm expects the price of output to be $10, what is the optimal level of employment? How does this compare to your answer in part (a)? If the firm hires these workers, but then finds out that the price of output is $5, what will the frim do? What if the price is $2? Explain.
c. Explain (qualitatively) how your answer to part (b) would change if the hiring and training costs were higher or lower. How can these results be used to predict the patterns of layoffs across occupations and industries during economic downtowns?
In: Economics
Does the required accounting treatment for an interest in a joint operation differ from the requirements for an interest in a joint venture and, if so, how do these requirements differ?
In: Accounting
Obligation Debt Amount Min Monthly Amount Annual Interest Rate Student loans $40,000.00 $500.00 6.00% Car loan $11,500.00 $375.00 9.50% Chase credit card $2,100.00 $84.00 18.00% Amazon credit card $1,050.00 $42.00 15.00% TJ Maxx credit card $380.00 $15.00 24.00% You recently graduated with a reasonably well paying job and after reviewing your budget you have an extra $200 a month to put towards paying off your debts as you have built up an appropriate savings. In exactly 12 months, you have been promised a raise that will allow you to put a total of $400 a month towards paying down debts (original $200 plus another $200). How many months will it take to pay off the chase card if you pay the minimum monthly amount listed above on the Chase card? Hint: the first month the interest rate is 18%/12 = 1.5%. The interest owed is 1.5% of $2,100 = $31.50. So you will pay down your debt by $42-$31.50 = $10.50. This means you owe $2,100 - $10.50 = $2,089.50 the next month. (Use a spreadsheet!!). Your answer is between 90 and 100 months!! Use this technique later down below.Discuss two approaches a) paying the highest interest rate debts first or b) paying of the smallest first. Which is theoretically best and which is emotionally best for people. Do appropriate research and reference.
In: Finance
Discuss the various stakeholders involved in brand communication projects
In: Operations Management
Darwin Pharmaceuticals Pty Ltd (DPPL) imports a number of pharmaceutical products. In order to hedge its foreign currency transactions, DPPL entered into a number of forward rate agreements this year. Prior to this time, DPPL had had little exposure to derivative instruments, but a series of bad experiences resulting from fluctuating exchange rates convinced the company that a hedging strategy was necessary. During planning for the audit of DPPL, the company’s hedging arrangements were identified as inherently risky and increased testing was carried out in this area. A number of small errors were noted in accounting for hedge transactions, but there did not appear to be any material errors and as such, no adjustments were made. A review of the audit file suggests that the errors noted were a result of inexperience and poor controls in the area. While all of the errors were brought to the attention of the treasurer, who is responsible for the company’s hedging strategy, no further action has been taken to date.
REQUIRED: Outline what further action the auditor should take in response to the errors and control weaknesses identified. Justify your response.
In: Accounting