RSM 323 - Case Assignment _2 - Case Question

RSM 323 - Case Assignment _2 - Case Question - LH Fall 2010...

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LH Fall 2010 Page 1 of 5 RSM 323 Case Assignment #2 Case Question CompuHealth Inc. (CHI) is a provincially incorporated company in Ontario. CompuHealth manufactures and sells state of the art communication and proprietary computer telephone integration products, a technology that allows computers to control telephone functions. Although their products have universal application, their primary focus is within the healthcare and educational environments. Their main products are communication equipment, telephone based nurse call systems and voice enabled customer management systems. CompuHealth sells mainly to large and medium sized healthcare facilities (such as nursing homes and hospitals) in addition to smaller facilities and direct sales to individuals. Generally, all jobs require engineering to determine the quantity, type and use of resources to meet the customer’s specifications and thus contracts usually last between 6 months to 3 years. It is currently November 4, 2010. Your firm, McFarland & Chu LLP (MC), has been engaged to audit both the June 30, 2009 and June 30, 2010 financial statements for CHI. You, CA/CGA/CMA, have just been approached by the CHI partner Gord McFarland regarding the upcoming 2009 and 2010 CHI audits, which start next week. He mentions that very little work has been done on the file, with the exception of attendance at the June 30, 2010 year end inventory counts which were held at all three of CHI’s warehouses. Gord hands you a small file with some background information (Exhibit 1), his notes from a meeting with CHI’s CFO, Victor Singh (Exhibit 2) and some preliminary June 30, 2009 financial statements (Exhibit 3). He then asks you to prepare an audit planning memo, including key risk areas and specific audit procedures that may need to be performed. He also asks you to alert him regarding any other significant issues by the end of the day. Required: Prepare the memo requested by Gord.
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LH Fall 2010 Page 2 of 5 Exhibit 1 Background Information on CompuHealth CompuHealth has been experiencing rapid growth over the last two years, through a combination of acquisitions and increased presence in the market place. Revenues have doubled from 2008 to 2009 and they are currently on track to more than double revenues again
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This note was uploaded on 05/09/2011 for the course RSM 323 taught by Professor Lisaharvey during the Spring '11 term at University of Toronto- Toronto.

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RSM 323 - Case Assignment _2 - Case Question - LH Fall 2010...

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