years. Daniel is a dominating personality who is very ambitious The company has recently paid very large sums to two relatively unknown authors for new books which Daniel thinks will be highly successful. Bolington has borrowed heavily from its bank and a major repayment of the loan is due shortly. The company is already on its overdraft limit as a result of the advances to the new authors. Daniel is in negotiation with a foreign bank for further finance. Many of the company's books are printed in a country with an exchange rate which is very favourable to the UK. The financial press have lately suggested that this rate may change in the near future The company recently purchased a very large and very complex computer system to control all its affairs. The IT manager has just left and gone to Australia. The company has agreed to sponsor a sailor who is racing round the world single-handedly and the cost of this is not yet clear. The company has a racing yacht which Daniel sails. The company has received a writ from a person who alleges he has been wronged by a book published by the company. The company has large stocks of this book and is contesting the issue. The company has no formal management accounting system but the new IT system, when it is working, will supply this. Daniel wishes to maintain the company's high share price so that he can use the shares to take over a competitor. The company recently took over an ailing printing firm. Daniel reckons he can turn it round. Discussion - Identity and describe the principal business risks relating to Bolington - Justify an appropriate audit strategy for the first audit of Bolington - Suggest some procedures that Bolington could implement immediately to manage the risks. - What effect might these risks have on the financial statements? ep-by-step solution You are the manager responsible for prospective new clients and you have visited Bolington Publishing PLC which publishes a small range of fiction paperbacks. The chief executive is Daniel Dunbar and he has asked your firm to make a proposal for the company's audit and other services During the initial meeting you have ascertained the following: . The company's turnover has increased by about 20 per cent a year for the last three years. Daniel is a dominating personality who is very ambitious. The company has recently paid very large sums to two relatively unknown authors for new books which Daniel thinks will be highly successful. Bolington has borrowed heavily from its bank and a major repayment of the loan is due shortly, The company is already on its overdraft limit as a result of the advances to the new authors. Daniel is in negotiation with a foreign bank for further finance. Many of the company's books are printed in a country with an exchange rate which is very favourable to the UK. The financial press have lately suggested that this rate may change in the near future. The company recently purchased a very large and very complex computer system to control all its affairs. The IT manager has just left and gone to Australia. The company has agreed to sponsor a sailor who is racing round the world single-handedly and the cost of this is not yet clear. The company has a racing yacht which Daniel sails. The company has received a writ from a person who alleges he has been wronged by a book published by the company. The company has large stocks of this book and is contesting the issue The company has no formal management accounting system but the new IT system, when it is working, will supply this. Daniel wishes to maintain the company's high share price so that he can use the shares to take over a competitor The company recently took over an ailing printing firm. Daniel reckons he can turn it round. Discussion - Identity and describe the principal business risks relating to Bolington - Justify an appropriate audit strategy for the first audit of Bolington years. Daniel is a dominating personality who is very ambitious The company has recently paid very large sums to two relatively unknown authors for new books which Daniel thinks will be highly successful. Bolington has borrowed heavily from its bank and a major repayment of the loan is due shortly. The company is already on its overdraft limit as a result of the advances to the new authors. Daniel is in negotiation with a foreign bank for further finance. Many of the company's books are printed in a country with an exchange rate which is very favourable to the UK. The financial press have lately suggested that this rate may change in the near future The company recently purchased a very large and very complex computer system to control all its affairs. The IT manager has just left and gone to Australia. The company has agreed to sponsor a sailor who is racing round the world single-handedly and the cost of this is not yet clear. The company has a racing yacht which Daniel sails. The company has received a writ from a person who alleges he has been wronged by a book published by the company. The company has large stocks of this book and is contesting the issue. The company has no formal management accounting system but the new IT system, when it is working, will supply this. Daniel wishes to maintain the company's high share price so that he can use the shares to take over a competitor. The company recently took over an ailing printing firm. Daniel reckons he can turn it round. Discussion - Identity and describe the principal business risks relating to Bolington - Justify an appropriate audit strategy for the first audit of Bolington - Suggest some procedures that Bolington could implement immediately to manage the risks. - What effect might these risks have on the financial statements? ep-by-step solution You are the manager responsible for prospective new clients and you have visited Bolington Publishing PLC which publishes a small range of fiction paperbacks. The chief executive is Daniel Dunbar and he has asked your firm to make a proposal for the company's audit and other services During the initial meeting you have ascertained the following: . The company's turnover has increased by about 20 per cent a year for the last three years. Daniel is a dominating personality who is very ambitious. The company has recently paid very large sums to two relatively unknown authors for new books which Daniel thinks will be highly successful. Bolington has borrowed heavily from its bank and a major repayment of the loan is due shortly, The company is already on its overdraft limit as a result of the advances to the new authors. Daniel is in negotiation with a foreign bank for further finance. Many of the company's books are printed in a country with an exchange rate which is very favourable to the UK. The financial press have lately suggested that this rate may change in the near future. The company recently purchased a very large and very complex computer system to control all its affairs. The IT manager has just left and gone to Australia. The company has agreed to sponsor a sailor who is racing round the world single-handedly and the cost of this is not yet clear. The company has a racing yacht which Daniel sails. The company has received a writ from a person who alleges he has been wronged by a book published by the company. The company has large stocks of this book and is contesting the issue The company has no formal management accounting system but the new IT system, when it is working, will supply this. Daniel wishes to maintain the company's high share price so that he can use the shares to take over a competitor The company recently took over an ailing printing firm. Daniel reckons he can turn it round. Discussion - Identity and describe the principal business risks relating to Bolington - Justify an appropriate audit strategy for the first audit of Bolington