Snow Cat Manufacturing

Snow Cat Manufacturing $($SCM$)$ manufactures and sells high end snow machines and all terrain

vehicles $($ATVs$)$ to both retailers and to the Government of Canada and other Governments

around the world under custom contracts. Governments use both machines for numerous

capacities for environments with difficult terrains.

SCM was founded in $1920$ by Jack Frost. Jack was a mechanical engineer by trade and

originally developed the snow machine for the harsh Canadian winters. Jack$$s first prototype

was ready by $1922$ and by $1930$ SCM was producing and selling limited quantities of its Snow

Cat within the region.

By $1970,$ SCM was a public company with a household name and reputation for producing

quality snow machines.

You are the auditor in charge of the December $31,2023,$ audit of SCM$.$ Your firm, BBJLLP have

been the auditors for SCM for the past five years. The majority of the SCM shares $(60\%)$ are still

owned by the Frost family. Jill Frost $($Jack$$s Great$-$great$-$granddaughter$)$ is the current President

and Chief Operating Officer for SCM$.$ Jill has been the COO for the past eight years and your

audit firm has a very good working relationship with her.

It is now February $2024,$ and you are finalizing the year end audit of SCM$.$ Your audit

engagement partner has asked for the draft audit file by the end of the day for them to begin

their review. They have asked you to ensure that you highlight any outstanding issues as they

are aware that there likely are some, summarize any errors, and draft the management letter.

In addition to the SCM engagement, you are also just received an email from another of your

audit clients, Tinseltown Treats $($TT$).$ The email can be found in Appendix $4.$ After reading it$,$ you

realize that you must draft a memo to the audit partner for TT and get it to them by the end of

day as well.

With both tasks ahead of you, you sit down to exam the information that follows and to prepare

the two memos.

Required

Prepare the memos.