Prime Restaurant Suppliers Ltd. First Audit

Memo Date:October 26, 2010 To:Albert Desrosiers, CGA, Audit Manager From:Kevin Martin, CGA Ref: ground Restaurant Suppliers Ltd. jump Audit Discussed beneath ar around of the issues identified upon review of the oddment public opinion analyse and the various financial ratios, and after liberation through the release performed by our canvas senior, Paul Hamilton. These issues if not address appropriately may trespass our ability to conclude the visit in effect and efficiently. Financial Ratios and Balance Sheet Analysis: ? limpid Ratios: Although the cause to be perceived sets current assets increased from $2.9 million in 20X5 to $3.4 million in 20X6, and its current and quick ratios increased to 1.19 and 0.65 one by one from last grades figures of 1.08 and 0.63, they are importantly infra industry come of 1.31 and 0.98. In addition to this, the fact that the c bother does not mother any cash or unruffled short term investments incr eases the risk that the company may wipe out care liquidity issues in the near future. This will impact our audit work as we would need to do more significant work to confirm these year end balances. Since in that location could in like manner be a going concern issue we would afford to condition that the balances report on the balance sheet are reported at their interlock realizable value.

? Leverage Ratios: Although the knobs natural Liabilities / Total Assets ratio of 64.6% is in quarter with the industry ordinary of 60.4%, its long-run Liabilities / Total Assets ratio of 22.9% is significantly higher than the industry average of 5.9%. Since th! e company is highly leveraged it is in truth important to ensure that the year end balances of the balance sheet accounts are reported properly. We would have to ensure that proper skim off procedures were compel to record the payable accounts. We would also have to ensure that all the liabilities have been accrued and reported correctly at year end. ? Activity Ratios: The clients average collection expiration of 96.1 days is...If you want to get a full essay, fiat it on our website: OrderCustomPaper.com

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