Always Logistics is looking to execute a forensic accounting audit on their fiscal statements. in peculiar to accounting periods ended in the last five old ages. Mr. Jim Gallbally. has claimed authorization to supervise the fraud concern over the Company’s profit-sharing inducement for its administrative-level employees via a whistleblower history. and this would necessitate a survey on their gross revenues grosss informations and their internal control systems. The purpose of the confidence battle is to supplement the fraud concern being raised by Mr. Gallbally to the senior direction of the Company.

Furthermore. he intends to use a ‘full force of the law’ to those staff who have ‘purposefully inflated gross influx for personal fiscal gain’ . should the claims were to be founded. I am anticipating your full involvement with this battle. and you may widen your purpose to this battle via the contact inside informations that I will supply. I have attached the inside informations of my initial treatment with the client and our conditions of credence prior to the project of such battle.

Attachments: Detailss of the Interview conducted with Mr. Jim Gallbally. May 2010 ; Conditions of Acceptance for the Assurance Engagement. May 2010 Attachment 1: Detailss of the Interview conducted with Mr. Jim Gallbally. May 2010 • A significant one-year public presentation fillip is paid to each divisional director based on single end products every bit good as entire company public presentation. • There is a net income portion strategy for all non award ( administrative ) degree employees of Always. • The Chairperson of Always is Margot Hellicar.

• A stock broking house. Warm. Symes and Co is actively polling senior employees of Always to put in the company by taking out loans which may be capable to margin calls. Some board members have been known to talk favorably of such loans. A healthy demand for Always stock has seen their portion monetary value outperform the market index for the past four old ages. • Always is divided into divisions based on each province or district. Terminals are located in all provinces and the Northern Territory with Canberra depot portion of the NSW operation.

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These terminals have about 5-8 staff in each location being a senior director. two fiscal or clerical staff with the remainder being award degree terminal reception and bringing staff. • Head Office in Brisbane has 10 administrative staff and is where the CEO and CFO are located. along with the computing machine system and all the company fiscal records. • The company has had some tight hard currency flow issues over the past few old ages but ever manages to last though the support of their bankers or through happening new bringing contracts. peculiarly in the Northern Territory and North West Queensland. Conditions of Acceptance

1. The study would dwell of the appraisal of the Company’s internal control systems. and the soundness of the fiscal statements and auxiliary revelations issued in the last five old ages. and will non be of sentiment of the hearers. Should at that place be an sentiment that will originate in the class of the study and analyses. a auxiliary study will be issued in conformity of the auditing criterions ; 2. The study would dwell of material factors to the existent fillips sums and managerial opinion with respect to the issue of one-year fillips to its administrative-level employees ;

3. The hearers will stay their professional independency with respect to the behavior of the audit. as in conformity to subdivision 3. 5 of Professional Independence codification of the Forensic Accounting Standards ( APES 215 ) ; 4. The study will be in conformity with the International Auditing Standards and Forensic Accounting Standards ( APES 215 ) . and find the accounting rules conformity in relation to the Australian Accounting Standards Board ; 5.

The hearers will keep their professional competency and take due attention in the public presentation of their work in conformity with Section 130 Professional Competence and due Care of the Code ( 3. 11 ) of the Forensic Accounting Standards ( APES 215 ) ; 6. The confidential information acquired or have deliberated during the class of the audit shall merely be used in the professional public presentation of the audit done and hence proper permission must be acquired in conformity to Section 140 of the Forensic Accounting Standards ( APES 215 ) . ENGAGEMENT LETTER

To the Chairman of the Board Margot Hellicar ( or the appropriate senior direction or board of managers ) of Always Logistics: As requested by several of your stockholders. notably Mr. Jim Gallbally. we will carry on an audit of Always Logistics’s fiscal records. in peculiar. your hard currency flows. gross revenues gross records and notes to the fiscal statements for the last five old ages so accounting twelvemonth ended December 31. We would wish to show our credence and have understood the footings of this battle by the issue of this missive.

Our audit will be conducted with the purpose of supplying an nonsubjective position on the fiscal statements and the fiscal public presentation of your Company for the last five old ages from accounting period ended December 31. 2009. and the recent concerns refering to your profit-sharing inducement lauded by important Numberss of your stockholders. We will accept the battle offered and carry on the requested audit in conformity to the undermentioned accounting and auditing criterions: the International Auditing Standards. the Accounting Professional and Ethics Standards ( APES ) . and the International Standards of Assurance Engagements.

The followers will be used as to sketch the battle to be undertaken. and that the audit is in conforme with scrutinizing standards that may or may non be contested in a legal proceeding. The followers is besides to decently turn to the allegations of your administrative divisions misinterpreting fiscal Numberss that may be material to possible misstatements on your gross revenues grosss and your overall fiscal position for the last five old ages.

The audit will include analyzing grounds to be acquired back uping the sums and revelations to the gross revenues grosss. and besides the informations being used of your administrative divisions on a trial footing. and measuring the accounting rules used and important estimations made by direction. every bit good as measuring the overall fiscal statement presentation. With respect to the possible restrictions and the nature of the trial that will be conducted in the continuance of the battle. there will be scrutinizing hazards that there will be misstatements that may be material plenty will non be detected.

This is due to the built-in restrictions that has and is present of the accounting and internal control systems your company has adopted for your concern operations. As such. we would wish to show our purpose to utilize audit studies from old hearers. work of individuals of involvement. or your internal hearers. if there were any conducted prior to this battle. for comparing intents and to relieve us in confusing such allegations lauded against the fiscal position of your Company.

However. we would wish to emphasize that because of the necessity that may originate to utilize old audit studies or paperss of a similar standing. the overall appraisal will now be our duty. and will be capable to any reverberations. legal or otherwise. towards the consequence of the appraisal. In add-on to our scrutinizing study for the intent of this battle. we expect to supply you with a separate missive or papers on any material failings in the accounting and internal control systems that your company has adopted that we have come to be of concern of in the continuance and the completion of our audit.

However. we would wish to repeat that as this is non the purposeful purpose of the audit. this auxiliary papers may or may non be of usage that may show the effectivity of your current accounting and internal control systems. and that it would be your determination on whether to move upon our observations for the intent of amending or signing your current accounting and internal control systems. with respect to the decision of the battle.

In conformity with the Forensic Accounting Standards. the working documents prepared in concurrence with our audit are the exclusive belongings of the auditing house and represent confidential information that is privy to the house and to your Company. They will be retained by our scrutinizing house in conformity with our house policies and processs. However. we will allow release of the working documents via a petition from a regulator or a individual of authorization in the context of the regulation of jurisprudence.

The regulator may bring forth photocopies or reproductions of the study and may finally make up one’s mind to administer the transcripts or reproductions to other parties of involvement. including authorities bureaus. The duty for the readying and equal revelation of the fiscal statements to be procured as requested is that of the direction of Always Logistics. either by its fiscal or accounting section. the board of managers. or any outfit or section that represents the Company.

This includes any care of equal accounting records and internal controls. the choice and justification of the accounting policies to be applied. the application of accounting policies. the safeguarding of assets of the company. and other auxiliary or aggregative informations that would farther help us in our audit. In line with this. we duly bespeak a written verification from you. the board of managers or the senior direction. sing representations refering the audit to be conducted in the affair of transparence and the regulation of jurisprudence.

Should you mean to print our comprehensive and conclusive audit study on your fiscal statements and administrative operations with respect to the allegations of gross revenues grosss embroidering activities. we require you to bring forth a printers’ cogent evidence or masters’ transcript for reappraisal or blessing prior to the concluding print and distribution of the said study.

We are looking frontward to the company’s full cooperation from your staff and/or forces who will be involved for the procedural completion of this battle. and that we to the full entrust the duty from your good company that all requested and compulsory paperss. including its supplementary or sum documents. and systems entree will be made available to us with respect to the behavior of the battle.

Our auditing fees. which will be classified as working advancement or works in advancement in your accounting diaries and general leger. will be based on the clip that will be spent by our comptrollers assigned for the procedural completion of the engagement plus straight-out yet necessary disbursals. We will utilize the Company’s staff at any possible clip or event to help us in the behavior of the agendas to be followed as per procedure sing the audit and the analyses of the histories and concern units in inquiry.

We believe that this would relieve us with the clip demands. the timely or instead immediate decision of the battle. and the nest eggs that will be generated and good for you with respect to the audit fees. This papers will be effectual for the clip being of the battle unless the agreed party will be doing alterations. call off the battle. or if the said battle will be interrupted by a regulation of jurisprudence. Kindly affix your signature and send on the affiliated transcript of this papers to mean your apprehension and understanding of the battle.


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