SML INCORPORATED (Suggested Time: 100 minutes) XXL Inc. (XXL) is a large private company that was established in Mississauga in 1966. XXL produces mobile handsets, digital appliances, digital displays and computer products. XXL aims to rank among the world's top three electronics, information, and telecommunications firms by 2028. To achieve this ranking, part of XXL's growth strategy is to acquire competitors that enable the company to obtain new technologies, expand its client base and to reduce its competition in the marketplace. You, CPA, are an audit senior at B&P, Chartered Professional Accountants (B&P). B&P has audited XXL for the last five years. The company has a December 31 year-end. It is now September 15, 2022. The audit partner, Ana Smith, has asked to speak with you in her office. She begins, "XXL just purchased a new subsidiary, SML Incorporated (SML). The deal was finalized on August 1, 2022. As part of the purchase agreement, SML has agreed to an audit of its financial statements for the yea