4 – Notes from discussion with Group audit committee and finance director. Recent publicity During the year, the Group attracted negative publicity when an investigation by a well-known journalist alleged that child labour was being used by several suppliers of raw materials to Lynott Co. The Group refuted the allegations, claiming that the suppliers in question had no contract to supply Lynott Co, and that the Group always uses raw materials from ethically responsible suppliers. The media coverage of the issue has now ended. The Group finance director is confident that the negative publicity has not affected sales of the Group’s products, saying that in fact sales are buoyant, as indicated by the increase in Group revenue in the year. Systems and accounting policies The Group has a policy of non-amortisation of the Browns brand name. The brand name was acquired many years ago and is recognised at its original cost. The previous audit firm accepted the policy due to the strength of the brand name and the fact that the Group spends a significant amount each year on product development and marketing aimed at supporting the brand. The Group has maintained a good market share in the last few years and management is confident that this will continue to be the case. As part of management’s strategy to increase market share, a bonus scheme has been put in place across the Group under which senior managers will receive a bonus based on an increase in revenue.
Exhibit 4 – Notes from discussion with Group audit committee and finance director. Recent publicity During the year, the Group attracted negative publicity when an investigation by a well-known journalist alleged that child labour was being used by several suppliers of raw materials to Lynott Co. The Group refuted the allegations, claiming that the suppliers in question had no contract to supply Lynott Co, and that the Group always uses raw materials from ethically responsible suppliers. The media coverage of the issue has now ended. The Group finance director is confident that the negative publicity has not affected sales of the Group’s products, saying that in fact sales are buoyant, as indicated by the increase in Group revenue in the year. Systems and accounting policies The Group has a policy of non-amortisation of the Browns brand name. The brand name was acquired many years ago and is recognised at its original cost. The previous audit firm accepted the policy due to the strength of the brand name and the fact that the Group spends a significant amount each year on product development and marketing aimed at supporting the brand. The Group has maintained a good market share in the last few years and management is confident that this will continue to be the case. As part of management’s strategy to increase market share, a bonus scheme has been put in place across the Group under which senior managers will receive a bonus based on an increase in revenue. The Group’s
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