Mark Jackson is the partner on the audit team for a new client, Central Companies (CC)....
Mark Jackson is the partner on the audit team for a new client, Central Companies (CC). The client hired Mark's firm in August 2022, in preparation for the December 31, 2022, audit. Mark's firm is replacing the predecessor firm that audited CC for the last 12 years. Since January 2022, CC has experienced a slowdown in sales as evidenced by lower inventory turnover ratios. Slower inventory turnover has negatively impacted operating cash flow, which has resulted in CC paying some of its suppliers late. Some of the smaller suppliers are demanding that CC pay cash on delivery of inventory items. Mark is also aware of the correspondence between CC and its bank that indicates the company started having cash flow problems as far back as 2021. CC's management is convinced that business will pick up and therefore has not laid off any employees or made any other strategic changes to try and improve cash flow.
Required: Discuss any significant events or conditions that Mark will consider when evaluating if there is substantial doubt about CC's ability to continue as a going concern.
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Mark Jackson is the partner on the audit team for a new client,
Central Companies (CC)....
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2019 Audit of Beta Industries: Summary
Information
Assume you are an audit manager, today is May 15, 2019, and your
public accounting firm is currently planning the 2019 financial
statement audit of Beta Home Goods, a retailer in the home goods
and supply industry. Beta is a public company with a 12/31
year-end, and a new client for your firm. The audit partner has
asked you to help plan the audit for this new client using the
following information obtained...
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