Always Logistics Case Study Essay

forever Logistics is feeling to perform a forensic business relationship study on their financial statements, in pieceicular to accounting periods cease in the last five historic period. Mr. Jim G allbally, has claimed authority to oversee the fraud busy over the Comp boths profit-sharing incentive for its administrative-level employees via a whistleblower account, and this would dominate a study on their sales revenues data and their internal turn back systems. The intention of the assurance habituate is to supplement the fraud concern be raised by Mr.Gallbally to the senior management of the Company.Moreover, he intends to apply a full force of the law to those mental faculty who have purposefully expand revenue inflow for personal financial gain, should the claims were to be founded. I am expecting your full interest with this engagement, and you may extend your intention to this engagement via the contact details that I leave behind come through. I have link th e details of my initial discussion with the client and our conditions of acceptance prior to the proletariat of such engagement.Attachments Details of the Interview conducted with Mr. Jim Gallbally, may 2010 Conditions of Acceptance for the Assurance Engagement, May 2010 Attachment 1 Details of the Interview conducted with Mr. Jim Gallbally, May 2010 A cheering annual exploit bonus is paid to each divisional coach based on individual outputs as swell up as come up troupe performance. There is a profit share scheme for all non award (administrative) level employees of Always. The Chairperson of Always is Margot Hellicar. A stock broking firm, Warm, Symes and Co is actively canvassing senior employees of Always to invest in the party by taking out loans which may be subject to border calls. Some board members have been k right offn to speak favourably of such loans. A healthy demand for Always stock has seen their share value outperform the market index for the past four historic period. Always is dual-lane into divisions based on each state or territory. Depots are rigid in all states and the Northern Territory with Canberra depot part of the NSW operation.These depots have about 5-8 staff in each location universe a senior manager, two financial or clerical staff with the rest being award level depot receipt and language staff. Head Office in Brisbane has 10 administrative staff and is where the chief executive officer and CFO are located, along with the computer system and all the company financial records. The company has had some tight cash flow issues over the past few years but always manages to survive though the support of their bankers or through finding new delivery contracts, especially in the Northern Territory and North West Queensland. Conditions of Acceptance1. The circulate would consist of the assessment of the Companys internal insure systems, and the wisdom of the financial statements and adjunct disclosures issued i n the last five years, and depart non be of opinion of the canvasors. Should there be an opinion that will build up in the stemma of the report and analyses, a adjunct report will be issued in conformance of the take stocking standards 2. The report would consist of somatic factors to the true(a) bon manipulations amounts and managerial judgement with regard to the way out of annual bonuses to its administrative-level employees3. The auditors will quell their professional independence with regard to the conduct of the audit, as in concord to section 3. 5 of Professional Independence code of the rhetorical explanation Standards (APES 215) 4. The report will be in compliance with the International Auditing Standards and Forensic invoice Standards (APES 215), and determine the accounting principles compliance in relation to the Australian Accounting Standards Board 5.The auditors will maintain their professional competence and guide due care in the performance of their exertion in conformation with Section 130 Professional Competence and due Care of the reckon (3. 11) of the Forensic Accounting Standards (APES 215) 6. The private information acquired or have deliberated during the course of the audit shall only be used in the professional performance of the audit done and therefore proper permission must be acquired in accordance to Section 140 of the Forensic Accounting Standards (APES 215). espousal LETTERTo the Chairman of the Board Margot Hellicar (or the appropriate senior management or board of directors) of Always Logistics As pass along by several of your shareholders, notably Mr. Jim Gallbally, we will conduct an audit of Always Logisticss financial records, in particular, your cash flows, sales revenue records and notes to the financial statements for the last five years then accounting year ended December 31. We would care to take our acceptance and have understood the terms of this engagement by the issuance of this letter.Our audit will be conducted with the intention of providing an objective perspective on the financial statements and the financial performance of your Company for the last five years from accounting period ended December 31, 2009, and the recent concerns pertaining to your profit-sharing incentive lauded by significant numbers of your shareholders. We will accept the engagement offered and conduct the put acrossed audit in accordance to the following accounting and auditing standards the International Auditing Standards, the Accounting Professional and Ethics Standards (APES), and the International Standards of Assurance Engagements.The following will be used as to outline the engagement to be undertaken, and that the audit is in conforme with auditing criteria that may or may not be con tryed in a legal proceeding. The following is withal to properly address the allegations of your administrative divisions misconstruing financial numbers that may be material to possible misstatement s on your sales revenues and your overall financial status for the last five years.The audit will include examining evidence to be acquired supporting the amounts and disclosures to the sales revenues, and also the data being used of your administrative divisions on a test basis, and assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement deportation. With regard to the possible limitations and the spirit of the test that will be conducted in the duration of the engagement, there will be auditing risks that there will be misstatements that may be material enough will not be detected.This is due to the inherent limitations that has and is present of the accounting and internal control systems your company has pick out for your business operations. As such, we would like to express our intention to use audit reports from previous auditors, work of persons of interest, or your internal auditors, if there were any conducted prior to this engagement, for comparison purposes and to lighten us in confounding such allegations lauded against the financial status of your Company.However, we would like to stress that because of the necessity that may arise to use previous audit reports or muniments of a similar standing, the overall assessment will now be our responsibility, and will be subject to any repercussions, legal or otherwise, towards the result of the assessment. In addition to our auditing report for the purpose of this engagement, we expect to provide you with a separate letter or enumeration on any material weaknesses in the accounting and internal control systems that your company has adopted that we have come to be of concern of in the duration and the destruction of our audit.However, we would like to restate that as this is not the purposeful intention of the audit, this supplementary document may or may not be of use that may demonstrate the effectiveness of you r incumbent accounting and internal control systems, and that it would be your decision on whether to act upon our observations for the purpose of amending or ratifying your current accounting and internal control systems, with regard to the conclusion of the engagement.In compliance with the Forensic Accounting Standards, the working papers prepared in partnership with our audit are the sole property of the auditing firm and constitute confidential information that is privy to the firm and to your Company. They will be retained by our auditing firm in accordance with our firm policies and procedures. However, we will grant uncover of the working papers via a request from a regulator or a person of authority in the context of the practice of law.The regulator may produce photocopies or replications of the report and may ultimately set to distribute the copies or replications to other parties of interest, including government agencies. The responsibility for the preparation and comely disclosure of the financial statements to be procured as requested is that of the management of Always Logistics, either by its financial or accounting department, the board of directors, or any outfit or department that represents the Company.This includes any maintenance of equal to(predicate) accounting records and internal controls, the selection and justification of the accounting policies to be applied, the activity of accounting policies, the safeguarding of assets of the company, and other supplementary or aggregate data that would farther assist us in our audit. In line with this, we duly request a written confirmation from you, the board of directors or the senior management, regarding representations concerning the audit to be conducted in the matter of transparency and the rule of law.Should you intend to bother our comprehensive and conclusive audit report on your financial statements and administrative operations with regard to the allegations of sales reve nues padding activities, we require you to produce a printers proof or masters copy for review or flattery prior to the final print and distribution of the say report.We are looking forward to the companys full cooperation from your staff and/or effect who will be involved for the procedural utmost of this engagement, and that we fully dedicate the responsibility from your good company that all requested and mandatory documents, including its supplementary or aggregate papers, and systems access will be made in stock(predicate) to us with regard to the conduct of the engagement.Our auditing fees, which will be classified as working progress or works in progress in your accounting journals and general ledger, will be based on the prison term that will be spent by our accountants assigned for the procedural completion of the engagement plus outright yet necessary expenses. We will use the Companys staff at any possible sentence or event to assist us in the conduct of the sched ules to be followed as per process regarding the audit and the analyses of the accounts and business units in question.We believe that this would gentle us with the time requirements, the timely or rather immediate conclusion of the engagement, and the savings that will be generated and beneficial for you with regard to the audit fees. This document will be effective for the time being of the engagement unless the agree party will be making changes, cancel the engagement, or if the said engagement will be interrupted by a rule of law. Kindly affix your signature and forward the attached copy of this document to signify your understanding and agreement of the engagement.