BUS 111W Lecture Notes - Lecture 2: General Ledger, Trial Balance, Human Resources

• School: University of Waterloo
• Department: Business (Wilfrid Laurier University)
• Course: BUS 111W
• Professor: high

Document Summary

5-1: your pa firm has been auditing ontario pulp company for three years. Two years ago, a letter was received from the provincial government informing them that they needed to reduce the level of contaminants that they were releasing into the air and into local waterways. The deadline for this reduction is three months from today. The letter indicates significant fines (several hundred thousand dollars) if the targets are not met. Alternatively, the company will need to shut down operations until the targets are met. During your audit planning process, management informed you that they have not taken any action but plan to start construction of the new pollution devices next month. Explain the impact the above situation has upon your audit planning process. Why has management really decided to wait so long: the controller who had been with bianca limited for six years was fired last month, allegedly for pocketing cash.