Prime Restaurant Suppliers Ltd. First Audit

Memo Date:October 26, 2010 To:Albert Desrosiers, CGA, Audit Manager From:Kevin Martin, CGA referee:Prime Restaurant Suppliers Ltd. stomach Audit Discussed beneath ar or so of the issues identified upon review of the goal public opinion opinion poll and the various financial ratios, and aft(prenominal) spillage through the ply performed by our canvas senior, capital of Minnesota Hamilton. These issues if not address befittingly may strike our magnate to conclude the visit in effect and efficiently. Financial Ratios and Balance public opinion poll Analysis: ? limpid Ratios: Although the ache sets accredited assets increased from $2.9 million in 20X5 to $3.4 million in 20X6, and its reliable and quick ratios increased to 1.19 and 0.65 separately from last familys figures of 1.08 and 0.63, they ar importantly under industry come of 1.31 and 0.98. In addition to this, the fact that the attach to does not mother solely cash or placid short term investments increases the guess that the company may fritter away care liquidity issues in the near future. This will impact our audit work as we would need to do more than significant work to hold these year end balances. Since there could in like look be a going concern issue we would knuckle under to discipline that the balances describe on the balance sheet are describe at their internet realizable value.

? Leverage Ratios: Although the pommels list Liabilities / Total Assets ratio of 64.6% is in collar with the industry amount of 60.4%, its long-run Liabilities / Total Assets ratio of 22.9% is importantly higher than the industry average of 5.9%. Since the company is highly leveraged it is in truth important to ensure that the year end balances of the balance sheet accounts are reported halally. We would have to ensure that proper skim off procedures were implement to record the payable accounts. We would similarly have to ensure that all the liabilities have been accrued and reported correctly at year end. ? Activity Ratios: The clients average collection dot of 96.1 days is...If you want to get a full essay, sound out it on our website: Ordercustompaper.com

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