Gwynn & Co. is a small firm of chartered accountants in Cardiff. The audit partner has been asked to make a proposal to Alhambra Bingo Clubs

(ABC), a Cardiff-based company, which wants to change from its present auditors.

I was introduced to Simon Kramer at the golf club on Saturday. He is a director of Alhambra Bingo Clubs. His father, Jack, is the MD and gradually retiring from active involvement with the company. I get the impression that Howells, who are ABC’s present auditors, were Jack’s choice and Simon fancies a change to somebody a bit more dynamic.
They haven't fallen out with Howells, but I gather that Simon wants advice about computerizing ABC’s system, which Howells can’t provide.........

Question

1. Assume that ABC’s directors accept Gwynn & Co.’s proposal. What steps must Gwynn & Co. now take? Suggest the contents of any letters they will need to write.
2. Prepare a plan for the 19X8 audit. It should cover:

(a) the timing of the audit;

(b) locations to be visited;

(c) nature of audit tests to be performed;

(d) any possible problem areas.

Transcribed Image Text:

Gwynn & Co. PEOPLE INVOLVED Ron Dare (RD): Senior Partner Louise Gordon (LG): Audit Partner Tim West (TW): Audit Senior Alhambra Bingo Clubs Simon Kramer (SK): Financial Director Peter Foley (PF): Accountant DOCUMENTS 1.1 Gwynn & Co. - Memorandum From RD To LG Louise 7 January 19X8