- 10 Marks
AAA – Nov 2018 – L3 – Q5a – Audit-related services
Identification and explanation of due diligence assignments relevant to an acquisition.
Question
Palm Oil Processing Company Ltd is a palm oil processing company founded in 2001. The processing is done at five different locations within the West Akim District of the Eastern Region. The company is facing a problem of the supply of palm fruits (the raw material of the company). To ensure regular supply of palm fruits, Palm Oil Processing Co. Ltd. approached the Directors of Ayensu Palm Plantations Ltd. to acquire their company. The Directors of Palm Oil Processing Company approached Western Auditors, a firm of Chartered Accountants, to conduct a due diligence review on Ayensu Palm Plantation Ltd.
Required:
As audit manager of Western Auditors:
i) Identify FIVE (5) practical examples of due diligence assignments and which one(s) would be relevant to Ayensu Palm Plantation Ltd. (5 marks)
ii) Explain FIVE (5) issues you would include in your due diligence review inquiries on Ayensu Palm Plantations Ltd. (5 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Acquisition, Due diligence, Financial review
- Level: Level 3
- Topic: Audit-related services
- Series: NOV 2018