You are a CPA and XYZ Company has just hired you as their controller. XYZ is a brand-new company and their head office is located in Moose Jaw, Saskatchewan. The shares in XYZ are currently privately held by two individuals who are both Canadian citizens. The shareholders expect that within four to five years they will be ready to take the company public. They aren’t sure at this time whether they want to have XYZ’s shares listed on the Toronto Stock Exchange (TSE) or the New York Stock Exchange (NYSE). There are currently forty employees working at the company. XYZ was approved for a loan and line of credit from Western Bank. Western Bank is requiring that XYZ’s financial statements must be audited. You are responsible for preparing the financial reports for XYZ and must decide on the GAAP used to prepare the financial reports. 

Required: 

1). What are the GAAP options available to XYZ for preparing their financial reports? 

2). Which GAAP would you recommend that XYZ use and why? 

3). What is the main responsibility of XYZ’s auditors in relation to the financial reports? 

4). Who are the main stakeholders of XYZ Company at the present time?