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Apr 13, 2023
  • You are a manager working for McBride & Murphy Partners (MBM), a medium-sized firm of chartered certified accountants. Your firm was recently approached by Jessica Blunt, the managing director and majority shareholder of Kidzplay, a wholesaler and distributor of children’s toys. She has asked your firm to consider taking the role of an auditor to Kidzplay.

    Ms. Blunt also would like the audit firm to provide business consultancy and advice as she is hoping to make a business plan and obtain finance to establish a new manufacturing facility in China.

    You are an audit manager in MBM and the partners at your firm have asked you to consider if the firm should accept both of these roles with Kidzplay.

    You make the following notes from your initial meeting with Ms. Blunt:

    The draft financial statements show revenue for the year ended 31 January 2023 at €12m (2022: €7m), profit before tax at €2.7m (2022: €1.5m), and total assets of €9.5m (2022: €5.3m).

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