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ABC COMPANY
This audit report relates to the financial report of the ABC Ltd. for the year ended 30
December 2006 . It refers only to the statements named below.
It does not provide an opinion on any other information which may have been
hyperlinked to/from the audited financial report.
The financial statements comprise:
Balance Sheet
Income Statement
Cash-Flow
These financial statements are the responsibility of the management of the Company.
The audit report was conducted in accordance with the accounting principles generally
accepted in the United States of America issued by FASB.
The nature of an audit is influenced by factors such as the use of professional judgement,
selective testing, the inherent limitations of internal control, and the availability of
persuasive, rather than conclusive, evidence. Therefore, an audit cannot guarantee that all
material misstatements have been detected.
Team of auditors
Garleanu Cristina
Grigoras Cristina
Iconaru Claudia
Ionescu Elena Lorena
Popa Ramona
Audit Approach
We have analised the ABC Company's Current Liabilities, meaning the company's
debts or obligations that are due within one year. Current liabilities appear on the
company's balance sheet and include short term debt, accounts payable, accrued liabilities
and other debts.
2006
2005
Short-term borrowings
Trade payables
Other liabilities
Capital leases- current portion
Total current liabilities
7,788
12,855
4,495
__287
4,419
8,567
2,445
__131
25,425 15,562
Audit Findings
1. Short Term Borrowings
Short-Term Borrowings is the amount that a company has drawn off from its line of
credit from a bank or other financial institution that needs to be repaid within the next 12
months.
We see here an increase of 3369 in short term borrowings from the year 2005 to 2006.
2. Trade payables
Trade payables is the money that the company currently owes to its suppliers, its partners
and its employees. Basically, these are the basic costs of doing business that a company,
for whatever reason, has not paid off yet.
In ABC's case, we have an amount of 12855. We also consider a 4288 increase from the
last accounting period.
3. Other liabilities
At December 31, 2006 and 2005, other liabilities consist of the following:
2006
Salaries and social taxes
SARs payable
Agriculture tax
Accrued payables
VAT and other taxes payable
Provision for Water Perla
Provision for bonuses
Provision for marketing
Total
590
215
249
125
1,449
200
1,092
575
4,495
2005
359
164
343
99
748
547
178
2,445
the Company assumes substantially all the benefits and risks of ownership are classified
as capital leases.
We observe an increase of 156 in capital lease liability.
Audit Opinion
1. We found a discrepancy between amounts recorded in Balance Sheet regarding the
increase of current liabities and those of Income Statement.
Total current liabilities
25,425 15,562
5,088
3,671
298
57
19
374
But, in the Balance Sheet, the capital lease shows an amount payable of 287, instead of
57.
3. The short term borrowings were calculated as follows:
2006 2005
Current portion
Alpha Bank Loan at LIBOR+2.75% interest due
monthly, principal due 2005-2006 (initial
loan: USD 464), collateralized by general pledge
Alpha Bank Overdraft at LIBOR 3 months+1.75%, due 2006
(initial overdraft: USD 6,500)
4,199
401
2,041
116
3,473
TOTAL
7,788
217
1,760
4,419