Reference no: EM132943640

General Household Appliances (GHA) is a closely held company owned by the Hillis family. The company has a long history dating back to the early 1900s. The company manufactures small household appliances, such as toasters, blenders, coffee makers, and indoor grills. GHA's products are well known for their quality and affordability. The company follows IFRS.

• Recently, the company has been experiencing poor financial results due to increased competition, lack of new product development, and the increasing power of the retailers in the supply chain. As a result, Larry Hillis, the former CEO, was recently relieved of his duties.

• On September 1,2017, the board of directors elected to hire Martha Blazeski as the new CEO. Martha is a well known turnaround specialist and is the first person outside of the Hillis family to become CEO of GHA.

• It is now January 7, 2018, and GHA is preparing for its December 31, 2017 year-end financial statement audit. GHA is a long standing client of the public accounting firm of Lebeau and Liang, LLP. You are the senior accountant with Lebeau and Liang, LLP who is responsible for GHA's audit. The partner in charge of the audit recently met with Martha, and has provided you with a copy of the draft financial statements and notes from her meeting with Martha (Exhibit II). The partner has asked you to prepare a memo to the audit file that addresses your concerns regarding:

a) Identify key users of the financial statements and their objectives

b) List all the issues in the case. List the GAAP principle and a few words about the issue using case facts. i.e. revenue recognition, contract 123.

c) Analyze qualitative and quantitively (if applicable) three financial accounting issues using IFRS standards supported by case facts and provide recommendations for each financial accounting issue.

Required

Problem 1: Prepare the report for the audit file.