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Big Builder S

The document discusses issues related to auditing three companies - Builder's Conglomerates, Rural Bank, and GSy City Mall - that are owned by Big Builder's Conglomerates Inc. There are likely many related party transactions between the companies that need to be disclosed. Management needs to be transparent about these transactions. Big Builder's does not have effective disclosure policies and procedures due to delays in communicating information. Their policies and procedures could be improved by establishing transparency and proper communication channels to disseminate information to stakeholders. Hiring a special consultant on financial and management advisory would benefit Mr. Sy in managing the three companies by assisting with financial and management decisions.

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Ken Mateyow
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577 views1 page

Big Builder S

The document discusses issues related to auditing three companies - Builder's Conglomerates, Rural Bank, and GSy City Mall - that are owned by Big Builder's Conglomerates Inc. There are likely many related party transactions between the companies that need to be disclosed. Management needs to be transparent about these transactions. Big Builder's does not have effective disclosure policies and procedures due to delays in communicating information. Their policies and procedures could be improved by establishing transparency and proper communication channels to disseminate information to stakeholders. Hiring a special consultant on financial and management advisory would benefit Mr. Sy in managing the three companies by assisting with financial and management decisions.

Uploaded by

Ken Mateyow
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CASE STUDY : Big Builder's Conglomerates Inc.

a. Assuming you are the auditor of the three (3) companies: Builder's Conglomerates, Rural
Bank, and GSy City Mall, what are the major issues, concerns, and disclosures that need to
be addressed? (TIP:Focus more on Related Party Transaction)
If there is one auditor for the three companies, there will be many issues which will arise in
the organization. The three companies has an existing loan from different creditors which creates
confusion between concern entities and shareholders. To facilitate the audit process, management
should be up-front with auditors about all related party transactions, even if they are not required
to be disclosed or consolidated on the company’s financial statements. As there are three firms so,
there will be confusion in the transactions of the three firms.

b. After identifying the major issues, do you think Big Builder's Conglomerates has effective
disclosures policies and procedures? Why or why not?
No, they do not have effective disclosure policies and procedures as there is delay in the
spread of information regarding policies and procedures in the organization which maybe cause
by the confusion in the transactions of the firms.

c. How can Big Builder's improve their disclosure policies and procedures? Create one (1)
based on your knowledge from the Code.
The disclosure policies and procedures can be improved through creating the transparency in
the policies and procedures. The proper channels of communication should be established. The
meetings should be organized with the stakeholders.
According to my knowledge from the code, I created the following disclosure policy and
procedure:
Whenever there is formulation of any policy or procedure, it should be communicated to every
stakeholder as soon as possible.

d. What can you say about the hiring of Special Consultant on Financial and Management
Advisory by Mr. Sy? 
If Mr. Sy hire a special consultant on financial and management advisory then it will be very
beneficial for Mr. Sy as he is managing three companies. Every company have to maintain its
financial information and also need advice on various topics. If there is financial and management
advisory then Mr. Sy will not face any difficulty while taking financial and management
decisions as he has assistance while taking those decisions.
As the person hired is special consultant, he will make all the decisions right which will be
beneficial for the organization. The advice will be considered as expert advice.

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