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Orion Ltd. (Orion) is a private company based in Charlottetown, P.E.l., which commenced operations in October of 20XO. After three months of losses, it quickly
Orion Ltd. (Orion) is a private company based in Charlottetown, P.E.l., which commenced operations in October of 20XO. After three months of losses, it quickly began turning a profit. Most of Orion's business comes from a matchmaking service for clients who are seeking a long-term romantic relationship, while the rest of the business caters to newcomers to Charlottetown looking to build friendships and social networks. It is now September 25, 2OX1, and you, CPA, have just met with Sasha Wall, a partner at Brick and Wall Chartered Professional Accountants (B&W). Sasha tells you that the firm has recently accepted Orion as a new audit client, and that you will be the senior on the engagement. Orion's bank has insisted that an audit be performed and that the financial statements be prepared using accounting standards for private enterprises (ASPE). There are no specific covenants on the bank loan, but the bank manager noted that she 'Will be monitoring the profitability of this start-up business very closely.\" Orion has a September 30 year end. Sasha explained that she met with Rico Ranch, president and sole shareholder of Orion, earlier today. She took detailed notes during the meeting as Rico gave her an overview of recent events at Orion and described how Orion has accounted for various items (see appendix). Sasha has asked you to discuss any accounting issues that you identify and provide valid audit procedures addressing each of the significant accounting issues and the risks they pose. You do not need to complete an audit planning memo for now
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