GABBY QUESTION - Part A - Question 1 (29 marks - 65...

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Part A - Question 1 (29 marks - 65 minutes) Gabby Manufacturing is a privately-owned leading manufacturer and distributor of lockers, locks, and keys for numerous industries. It is best known for its widely used locker system with the plastic orange cap. Gabby sells two types of lockers: postal (used in mail delivery) and non postal (i.e. evidence lockers used in law enforcement). Gabby serves a variety of customers in Canada, United States, Mexico and Europe. Gabby has had excellent growth and profits in the past decade, primarily as a result of the leadership provided by the owner, Bill Gabby. In the current year, the economic crisis has caused demand of all types of lockers to decline, resulting in a decline in Gabby’s sales. Noah Smart, CA, has been the partner in charge of the audit of Gabby Manufacturing Company (Gabby) for 15 years. Smart has always enjoyed a close relationship with Bill and prides himself on having made several constructive comments over the years that have aided in the success of the company. Several times in the past few years, Smart’s CA firm has considered rotating a different partner on the engagement, but this has been strongly resisted by both Smart and Gabby. Although there had been problems with internal controls in the early years of the audit; in recent years, internal controls have been strong. There have normally been no audit adjustments, and the audit team has been able to reduce the level of substantive
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This note was uploaded on 09/29/2011 for the course ADMS 4551 taught by Professor Iacobelli during the Spring '11 term at York University.

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GABBY QUESTION - Part A - Question 1 (29 marks - 65...

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