The director of Quick Clean Pty Ltd summary

Question 5(11 marks)

Leeanne Harris is the director of Quick Clean Pty Ltd, a family business that provides cleaning services. As Leeanne is interested in purchasing some new cleaning equipment for her business, she has approached a bank for finance. The bank has requested that Leeanne provide an audited financial report to assist them in considering her loan request. Leeanne has approached your firm for this service and you have been allocated the task of auditing Quick Clean for the year ended 30 June 2018. You have undertaken a preliminary review of the business and determined that a substantive testing approach would be appropriate. You are now preparing an audit program for the revenue cycle.

The following information has been obtained from your review:

  • Leeanne usually works 60 hours a week. Part of this time is spent travelling between clients and is not charged to the clients. The remaining time is charged at $50 per hour, regardless of the task undertaken.
  • Customers typically pay Leeanne in cash for the work undertaken, except for a small number of regular small-business customers. Leeanne allows these customers to pay on account by bank transfer on a monthly basis.
  • Leeanne supplies each cash customer with a written receipt, prepared manually from a receipt book purchased at the local newsagency. The book contains pre-numbered blank receipts, which are completed in duplicate.

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