Question
In: Accounting
One of the clients of MMM Chartered Accountants operates a restaurant. From January of the current...
One of the clients of MMM Chartered Accountants operates a restaurant. From January of the current year, the business has consistently paid its suppliers late, well in excess of the suppliers' normal credit terms. This has resulted in some suppliers requesting cash on delivery from the business. The auditor has reviewed the correspondence between the business and its bank and finds that the business has been experiencing cash flow problems for two years.
Required: (a) Explain why determination of materiality is a matter of auditor judgment. Refer to both qualitative and quantitative materiality assessments . (150 - 200 words)
b) Explain whether (and, if so, how) the information provided impacts on the auditor's assessment of preliminary materiality . (250 - 300 words)
Solutions
ekkarill92 answered 1 year agoRelated Solutions
One of the clients of MMM Chartered Accountants operates a restaurant. From January of the current...
One of the clients of MMM Chartered Accountants operates a
restaurant. From January of the current year, the business has
consistently paid its suppliers late, well in excess of the
suppliers' normal credit terms. This has resulted in some suppliers
requesting cash on delivery from the business. The auditor has
reviewed the correspondence between the business and its bank and
finds that the business has been experiencing cash flow problems
for two years. Required: (a) Explain why determination of
materiality...
One of the clients of MMM Chartered Accountants operates a restaurant. From January of the current...
One of the clients of MMM Chartered Accountants operates a
restaurant. From January of the current year, the business has
consistently paid its suppliers late, well in excess of the
suppliers' normal credit terms. This has resulted in some suppliers
requesting cash on delivery from the business. The auditor has
reviewed the correspondence between the business and its bank and
finds that the business has been experiencing cash flow problems
for two years. Required: (a) Explain why determination of
materiality...
One of the clients of MMM Chartered Accountants operates a restaurant. From January of the current...
One of the clients of MMM Chartered Accountants operates a
restaurant. From January of the current year, the business has
consistently paid its suppliers late, well in excess of the
suppliers' normal credit terms. This has resulted in some suppliers
requesting cash on delivery from the business. The auditor has
reviewed the correspondence between the business and its bank and
finds that the business has been experiencing cash flow problems
for two years. Required: (a) Explain why determination of
materiality...
One of the clients of MMM Chartered Accountants operates a restaurant. From January of the current...
One of the clients of MMM Chartered Accountants operates a
restaurant. From January of the current year, the business has
consistently paid its suppliers late, well in excess of the
suppliers' normal credit terms. This has resulted in some suppliers
requesting cash on delivery from the business. The auditor has
reviewed the correspondence between the business and its bank and
finds that the business has been experiencing cash flow problems
for two years. Required: (a) Explain why determination of
materiality...
One of the clients of MMM Chartered Accountants operates a restaurant. From January of the current...
One of the clients of MMM Chartered Accountants operates a
restaurant. From January of the current year, the business has
consistently paid its suppliers late, well in excess of the
suppliers' normal credit terms. This has resulted in some suppliers
requesting cash on delivery from the business. The auditor has
reviewed the correspondence between the business and its bank and
finds that the business has been experiencing cash flow problems
for two years. Required: (a) Explain why determination of
materiality...
Question 3 - Week 4 (7 marks) One of the clients of MMM Chartered Accountants operates...
Question 3 - Week 4 One of the clients of MMM
Chartered Accountants operates a restaurant. From January of the
current year, the business has consistently paid its suppliers
late, well in excess of the suppliers' normal credit terms. This
has resulted in some suppliers requesting cash on delivery from the
business. The auditor has reviewed the correspondence between the
business and its bank and finds that the business has been
experiencing cash flow problems for two years. Required: (a)...
Fellowes and Associates Chartered Accountants is a successful mid-tier accounting firm with a large range of clients across Canada.
Fellowes and Associates Chartered Accountants is a successful mid-tier accounting firm with a large range of clients across Canada. During 2011, 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 defectsYear end for all HCHG entities is June 30.You are an...
Fellowes and Associates Chartered Accountants is a successful mid-tier accounting firm with a large range of clients across Canada.
Fellowes and Associates Chartered Accountants is a successful mid-tier accounting firm with a large range of clients across Canada. During 2011, 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 defectsYear end for all HCHG entities is June 30.You are an...
You are one of the Audit Partners of XYZ Certified Chartered Accountants Firm. You have seen...
You are one of the Audit Partners of XYZ Certified Chartered
Accountants Firm. You have seen a new prospective client,
Performance Auto Parts Corporation. Performance Auto Parts has
three locations specializing in the sale of motor vehicle auto
parts as well as repair to motor vehicles. The business is owned by
a widow, Mrs. Armstrong, who inherited the business upon the
passing of her husband. Mrs. Armstrong has no relevant business
operation skills or knowledge of the industry in which...
Marley, an employee, entertains one of his clients on June 1 of the current year to...
Marley, an employee, entertains one of his clients on June 1 of
the current year to try to close a large sale for his company.
Entertainment expenses Marley paid are:
Cab fares
$50
Dinner, at which the deal was discussed
230
Tips at restaurant
30
Marley’s best course of action would be to:
a.
Take a $310 deduction on his tax return
b.
Take a $260 deduction on his tax return
c.
Take a $195 deduction on his tax return...
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