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Case Study Arun, Badal and Chavan are partners in a firm of constructions business. Since commencing in business in 15 months ago they have been fairly successful. Arun who has a Diploma in Business Management as well as in building constructions has kept the books and Arun has also prepared the first year's accounts. Three partners are discussing these accounts, which show a profit in excess of drawings. Badal and Chavan suggest that they could draw out the excess but Arun counsels caution, talking about working capital needs, which confuses the others. Chavan questions Arun on his interpretation of the partnership agreement, which is a fairly complicated document and suggests that they should pay to have the accounts audited. Arun gets upset and says that it would be a waste of money and he is perfectly capable of maintaining the accounts and will not charge his partners for his work. Discussion What benefits would the partners get from employing an independent auditor? Where would they find a suitable auditor? What type of expous ou can fraud they identify?

Case Study Arun, Badal and Chavan are partners in a firm of constructions business. Since commencing in business in 15 months ago they have been fairly successful. Arun who has a Diploma in Business Management as well as in building constructions has kept the books and Arun has also prepared the first year's accounts. Three partners are discussing these accounts, which show a profit in excess of drawings. Badal and Chavan suggest that they could draw out the excess but Arun counsels caution, talking about working capital needs, which confuses the others. Chavan questions Arun on his interpretation of the partnership agreement, which is a fairly complicated document and suggests that they should pay to have the accounts audited. Arun gets upset and says that it would be a waste of money and he is perfectly capable of maintaining the accounts and will not charge his partners for his work. Discussion What benefits would the partners get from employing an independent auditor? Where would they find a suitable auditor? What type of expous ou can fraud they identify?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Case Study Arun, Badal and Chavan are partners in a firm of constructions business. Since commencing in business in 15 months ago they have been fairly successful. Arun who has a Diploma in Business Management as well as in building constructions has kept the books and Arun has also prepared the first year's accounts. Three partners are discussing these accounts, which show a profit in excess of drawings. Badal and Chavan suggest that they could draw out the excess but Arun counsels caution, talking about working capital needs, which confuses the others. Chavan questions Arun on his interpretation of the partnership agreement, which is a fairly complicated document and suggests that they should pay to have the accounts audited. Arun gets upset and says that it would be a waste of money and he is perfectly capable of maintaining the accounts and will not charge his partners for his work. Discussion What benefits would the partners get from employing an independent auditor? Where would they find a suitable auditor? What type of exyous ou can fraud they identity?
Transcribed Image Text:Case Study Arun, Badal and Chavan are partners in a firm of constructions business. Since commencing in business in 15 months ago they have been fairly successful. Arun who has a Diploma in Business Management as well as in building constructions has kept the books and Arun has also prepared the first year's accounts. Three partners are discussing these accounts, which show a profit in excess of drawings. Badal and Chavan suggest that they could draw out the excess but Arun counsels caution, talking about working capital needs, which confuses the others. Chavan questions Arun on his interpretation of the partnership agreement, which is a fairly complicated document and suggests that they should pay to have the accounts audited. Arun gets upset and says that it would be a waste of money and he is perfectly capable of maintaining the accounts and will not charge his partners for his work. Discussion What benefits would the partners get from employing an independent auditor? Where would they find a suitable auditor? What type of exyous ou can fraud they identity?
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