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Extracts, from ‘BBC News' website 14th February 2012:
Former college business lecturer James Brennan had fallen out of love with his profession and was facing redundancy in July. A self-confessed "average Joe", he had a mortgage to pay, a family to support and credit card bills to service. Three months later he was running his own DIY car and bike servicing garage, stemming from his life-long love of motorsports.
"I'm breaking even but I'm not paying myself a wage yet. Luckily I have a very supportive family around me and hopefully this will take off."
Specialist business insurer Hiscox suggests that 17% of small businesses in 2011 were set up following one or more of their owners being made redundant.
Required:
In a report for the attention of James Brennan discuss the significance of alternative forms of finance available to him and the importance of the nature of the business entity in the process. Your report should relate to aspects considered in the module and core text book.
Your report should be 750 words and adopt the format (essential sections only) available from BISSTO:
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What is materiality? Why might the inventory loss concern management more than it does the auditors? Do you think the amount of inventory loss is material?
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