You are a new graduate at JOKO, a medium sized audit firm. Ti Spoon, one of the partners has asked you to assist in drafting a memo which she will use to address the audit committee of Kuppa Ltd. The company is expanding rapidly and currently has 12 shareholders, assets of $50 million and annual revenue of $20 million. Kuppa Ltd, a New Zealand company, is a new client and the audit committee has asked your firm for some guidance on the legal environment relating to their governance responsibilities. In particular, they have asked for clarification on certain matters:

Required: Ti Spoon has requested you to provide her with answers on the following (you are not required to provide references to sections of any Acts): a. For how long is the company required to keep accounting records and copies of financial statements? (1 mark)

b. What are their obligations regarding preparation and audit of financial statements under each of the following scenarios: i. Their current situation, ii. If they continue to expand rapidly? iii. If they decide to list on the New Zealand Stock Exchange?