Case_-_Chapter_1_-_CP1-5 - CP15 Case Analysis 1. Determine...

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CP1–5 Case Analysis 1. Determine your role and analyze the real required You are an advisor who is also a designated accountant. You are providing advice to Pedro regarding what to include or exclude in the report to the bank. The report is used to assess the approval of a bank loan so fair reporting is the over-riding objective. The risk of the engagement is high since there is specific reliance on the financial information/statement. 2. Identify the users and their information needs. If the case environment does not provide a clear indication of user objectives, you must make a reasonable assumption and integrate this assumption in your case analysis It appears that Pedro Gonzalez is motivated to maximize the net asset position of the business to ensure the approval of his bank loan. As a result, he will try to present a report that maximizes income and asset and minimize the reporting of liabilities. Bank is also an important user in this case.
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This note was uploaded on 12/29/2011 for the course MANAGEMENT MGTB05 taught by Professor Georgequanfun during the Fall '11 term at University of Toronto- Toronto.

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Case_-_Chapter_1_-_CP1-5 - CP15 Case Analysis 1. Determine...

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