Reference no: EM132463981

Juliet B a partner in Stamp & Hoppit, Registered Auditors, receives a telephone call from the Managing Director of Chateaubriand Ltd which runs a chain of restaurants and bars. They wish to appoint Stamp & Hoppit as auditors as they have a disagreement with the existing auditors. The audit would be due to commence in about two months' time.The Managing Director tells her that Chateaubriand runs a chain of 12 restaurants and 10 bars situated in the Northern region. It also sells ready meals under the 'Chateaubriand' name which are manufactured by another independent company; Chateaubriand buys them in, adds a margin and sells them on through supermarkets and smaller food retailers. This is becoming an increasingly significant part of the business.Juliet B carries out some further research and discovers that Chateaubriand is a private company wholly owned by the Staples family. The managing director is R. A. Staples, his son is the sales director and his wife is responsible for 'Product Design'. The finance director has been with the company for eighteen months and there have been three other finance director appointments in the last five years.The company turns over some £15m and made a profit of some £800 000 before tax in the last financial year.

Discussion

Question 1: What should Juliet B consider before accepting the appointment?

Question 2: What matters should be discussed at the meeting?

Question 3: What might be the consequences of omissions from the letter?