Transactions are related to some creative tax planning

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Reference no: EM131327028

During your review of the sales accounts at 120340 Ontario Inc., you enquired of management about sales to customer account 23-524. The account accumulates sales to a related company. The president of 120340 Ontario Inc. explained that the sales are at very favourable terms to 120340 Ontario Inc. The customer is a related company pays more than market value for the items it purchases from our 120340 Ontario Inc. and the transactions are related to some creative tax planning.

Required

Clearly identify and explain the matters that should be communicated to the audit committee.

Reference no: EM131327028

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