You, CPA, are the audit engagement lead on the 20X5 audit of Billys Bootcamp (Billys). Billys is a large fitness studio with three locations in Toronto, Ontario. The business is privately owned by Buster Van Kamp. Recently, Buster has been considering expanding Billys across Canada, and the company has taken a five-year term loan from the bank to help fund the expansion. Billys growth rate has attracted the attention of a local investment management firm, CCP Capital (CCP). CCP is considering investing in Billys and plans to base its decision on the 20X2 financial statements. You have received the following additional information: Billys has generated positive net income since it was founded, with the exception of the companys first

Test your understanding You, CPA, are the audit engagement lead on the 20X5 audit of Billy's Bootcamp (Billy's). Billy's is a large fitness studio with three locations in Toronto, Ontario. The business is privately owned by Buster Van Kamp. Recently, Buster has been considering expanding Billy's across Canada, and the company has taken a five-year term loan from the bank to help fund the expansion. Billy's growth rate has attracted the attention of a local investment management firm, CCP Capital (CCP). CCP is considering investing in Billy's and plans to base its decision on the 20X2 financial statements. You have received the following additional information: - Billy's has generated positive net income since it was founded, with the exception of the company's first year of operations. - The loan from the bank includes a covenant requiring Billy's to maintain a current ratio of 1.5:1. - In addition, the land, building, and equipment used in operations have been taken as collateral on the bank loan. - Billy's net income before tax for 205 is $2,050,500. - RMM is assess as HIGH for this engagement Required: 1. Identify the users of the financial statements and what their objectives are? 2. Calculate overall materiality