'' Auditing"

Andrea is the audit partner assigned to the audit of Allbright and Shiny Pty.Ltd, a sheetmetal manufacturer. Madam Allbright is the founding owner and CEO. She runs the company with an iron fist and is not willing to compromise with employees.

In recent years the company has come under heavy competition from new players in the market and had to reduce its margins. This year a recession occurred and hit the bottom line hard. Employees will receive a bonus if the profits before tax exceed $10 M per year but this has not been attained in recent times. Internal controls are adequate but any suggestions for improvement by Andrea has fallen on deaf ears.

Key Financial data include:

Current Year Unaudited $m Previous Year Audited $m Current assets 10 6 Non current assets 18 12 Total assets 28 18 Current liabilities 6 Non current Liabilities 3 Total Liabilities 16 9 Equity 12 9 Turnover 4O 35 Gross profit 20 20 Profit before tax 8 3