Accounting Class - Need Help =D?

You are reviewing the year-end financial statements of a small ($2 mil. revenues) company that has applied for a long-term loan from the bank. u note as you begin that a principal stockholder is your former college roommate. You are preparing your report %26amp; wonder about the following:





b. You have been working at the bookkeeper’s desk while she is on vacation. You pushed the desk blotter aside at one point %26amp; notice underneath it a bill to the company from a local florist for $55. The bill is dated December, but you do not see it recorded anywhere in the company’s books. A number of other unopened envelopes are under the blotter, the contents of which cannot be judged from the outside.





Should these items be disclosed in your report? Why? If you disclose, how should your disclosure be phrased? Should you disclose this to the company, to your employer, or in your report? Should the audit have been conducted differently? Keep in mind some fundamental qualitative principles

Accounting Class - Need Help =D?
If those ledgers and journals are closed out, and the bill has not yet been paid; you can add it to the January statement.


When you start doing things you "feel/think" are right, that's when the books start getting messed up.


For all you know, the company may not have even received the flowers yet. If that is the case, then that is not yet an "asset."


Don't forget about fiscal years either.


Of course, I would call the bookkeeper and ask what's up with this bill.


A flower company is usually a monthly bill anyway, much like the landscaping company that cuts the grass outside.