Phil Nanere is the partner in charge of the audit for a new client, Western Wonderland (WW).
Question:
Phil Nanere is the partner in charge of the audit for a new client, Western Wonderland (WW). The client engaged Phil’s audit firm in November 2022, in preparation for the 2023 audit. From January 30, 2023, onwards, WW has consistently paid its suppliers late, well in excess of the suppliers’ agreed credit terms.
This has resulted in some suppliers demanding cash on delivery from WW. Phil is also aware from his review of correspondence between WW and its bank that the company has been experiencing cash flow problems since 2020.
Required Identify any significant events or conditions that individually or collectively may cast significant doubt on WW’s ability to continue as a going concern.
Step by Step Answer:
Auditing A Practical Approach
ISBN: 9781119709497
4th Canadian Edition
Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton, Valerie Warren