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Auditing Case Study: Issues of Mount Pleasant Coffee Growers Cooperative Limited

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Auditing Case Study: Issues of Mount Pleasant Coffee Growers Cooperative Limited
Table of Contents

Background and Issues of Mount Pleasant Coffee Growers Cooperative Limited 2
Question 1 - Analytical Review Schedule of the farm and factory expenses 3
Question 2 - Audit Program for factory Wages and Administrative Salaries paid 7
Question 3 - Verification of the Coffee Industry Board Cess and the closing inventory of Coffee 13
Question 4 – Completing the Appropriation Account of Mount Pleasant 15 Question 5 - Presentation of simplistic financial Statements 16
Question 6 – Questions and Answers for Shareholders 24 Appendix 27

Background and Issues of Mount Pleasant Coffee Growers Cooperative Limited

The formation of Mount Pleasant Coffee Growers Cooperative Limited (Mount Pleasant) was as a result of the demand by coffee growers in Jamaica for better prices for their coffee as well as their desire for access to plant services and loans with greater benefits. The operations of Mount Pleasant in 1980 included purchasing coffee beans from members, processing the berries, selling the processed coffee to Coffee Industry Board (CIB). Later in 1999, this was extended to include a sales and marketing arm managed by the CIB. Mount Pleasant was initially audited by Registrar of Cooperative Societies and later by Lopez and Company.
The documents presented for analysis include the following: * Significant Accounting Policies: Permanent File Update Statutory Reserve- Year- end December 2002 * Draft Balance Sheet as at December 31, 2002 * Factory Operations Account: Year- end December 2002 * Administrative and Selling Expenses: Year- end December 2002 * Surplus and Deficit Appropriation Account: Year- end December 2002
While being audited by the Registrar of Cooperative Societies, Mount Pleasant was warned that they needed to tighten their internal controls. However, Lopez and Company issued an unqualified report stating that internal controls were satisfactory. The 2002 financial reports of Mount Pleasant

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