Wicon Waste Case Notes
Wicon Waste Case Notes
Wicon Waste Case Notes
Wicon Waste
Notes
Overall
Several material errors
Aggressive revenue recognition
Questionable ethics/integrity – wire transfer
All Asset and NI misstatements are increasing
Hoa needs to plan independently and obtain an independent understanding of internal control
Independent assessment of materiality
2
Audit Issues
Issue How to Address
Engagement acceptance was subject to receipt of Contact predecessor to follow up
all working papers; 11 pages missing – what is May need to resign if pages not forthcoming
missing? Why?
Two changes in auditors in two years – a red flag Increase professional skepticism
Tax audit could have material implications Examine correspondence; speak with tax
$451 x 20% x 9% - contingency? auditors; inquiry of management
Consult our own in-house tax department
Hazardous waste lawsuits Consider impact of lawsuit on financial
statements
Are the disclosure requirements met?
Accounts receivable confirmation procedures Did not maintain independent control over the
confirmation process
Should use a stratified sample, not just the high
dollar value items
Should include procedures to address municipal
receivables
Use of WWF’s fax machine means there was a
lack of control over the confirmations; may need
to reaudit these confirmations
Credit rating downgrade due to changing Does Hoa have the environmental expertise
environmental regulations needed to assess the impact? Are experts
required?
Useful lives of sites increased; has effect of Does Hoa have the environmental expertise
decreasing amortization charges; increasing NI needed to assess the impact? Are experts
reliable?
Is use of three amortization methods
appropriate?
If
Predecessor auditor using a combined approach Hoa needs to perform its own planning; obtain its
– relying on internal controls own understanding of internal control and the
client’s business before determining audit
approach
All misstatements are NI increasing Consider deliberate nature of misstatements
Increase skepticism and evidence
Consider possible fraudulent activity
BB’s work seems not to meet necessary quality Consider reporting BB to provincial accounting
standards association?
Professional Standards
Request missing 11 pages from predecessor
Much more evidence is required
Consider the need for other experts
Will not be able to address every issue in 72 minutes