Finance > STUDY GUIDE > Assignment 1 -Audit Risks and Going Concerns of Razor’s Edge Laser Cutting Inc. - Sheridan College (All)
Assignment 1 -Audit Risks and Going Concerns of Razor’s Edge Laser Cutting Inc. - Sheridan College FIN 4200D
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Memo To: Lionel Majors From: Jobert Bermudez Date: August 20, 2012 Subject: Audit Risks and Going Concerns of Razor’s Edge Laser Cutting Inc. Introduction The purpose of this memo is to docume... nt the going concerns found during the engagement with Kris Munroe, CFO, regarding Razor’s Edge Laser Cutting Inc. (Razor) This will address the current auditing issues with their business operations, their financial accounting framework, and their bank agreement with Bank of Manitoba. Going Concerns Found Indicators of Potential Going Concern Issues Evidence to Obtain from Client to Mitigate Going Concern Issues Accounts receivable based on the 2012 drafted balance sheet is overstated. There is a balance of $225,000 in the 180-days aging report that needs to be reassessed for uncollectible. Their client, Manley Mann, has not been paying the full amount based on their given invoices which concerns future business with them. Communicate with Manley Mann’s accounting department to discuss and confirm their current balance with Razor. Once confirmed, the 180-days balance will need to be reevaluated to ensure that their outstanding balanc [Show More]
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