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4520 Assignment 2

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ADMS 4520
Assignment # 2
Muhammad Choudhary
Student # 211085552
Section C
Haran Alagarajah
Student# 211337797
Section A
Handed into: Patricia Farrell
Submitted on: October 2nd, 2013

Case: 2-1
To: Fabio & Fox Chartered Accountants
Introduction:
Wonder Amusements Limited (WAL) is a company that was incorporated as an amusement park and golf courses. Recently WAL invested into a sports franchise which has caused the relocation of parts of the business.
Objective:
A meeting with the chief executive officer (Leo Titan) has shed some light on possible accounting and audit practises that need to be looked at. There are notes that was taken during the meeting with Leo and observations which will be further analyzed. The appropriate reporting method used in the following analysis will be IFRS.
Users/Stakeholders:
There a many potential users of the financial statements prepared by WAL and they are:
-Leo Titan – CEO, WAL - owners of, NSL - owners of, -Minority shareholders invested in WAL And NSL, Fabio and Fox accountants - they are audit partners, External users of the financial statements (such as potential investors), the government (many accounting issues that could violate standards).
Analysis:
First of all after the review of documents and as a result of various conversations there are a few issues that need to be addressed. The first issue is lenders to the arena are concerned that the arena could not generate special-use revenue and in turn risk their investment. This becomes an audit issue because the investors are providing a way to finance the arena but if the arena in turn cannot support the payment with its revenue streams it causes a possible situation where revenues are overstated to make the arena look good. This directly relates to the second issue as the mortgage lenders and minority shareholders want to see financial

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