11. Mike and Laurie expressed interest in changing the year-end inventory count
ID: 2568982 • Letter: 1
Question
11. Mike and Laurie expressed interest in changing the year-end inventory count date from December 31. Discuss the conditions that are necessary to change the year-end count date, identify the additional procedures that would be needed and evaluate whether it is possible to change the count date for the 20-7 audit.(6 marks) December is their biggest selling month of the year, and showing up on Dec 31 or Jan 2 to count inventory is not high on their, or their employee's, wish list. They'd find it much easier if they had January or even February to let things cool downExplanation / Answer
Yes. A company may change its financial year end by filing a form CoR25 with the CIPC which must comply with the following requirements;-
(1) it must be the first change of the financial year end for a specific year, as a company may only change its financial year end once during a particular financial year,
(2) the current financial year must not have ended,
(3) the new financial year end must be later than the date of the filing of the Form CoR25 with the CIPC,
(4) the new financial year end may not result in a financial year longer than 15 months; and
(5) the form CoR25 must be signed by an active director, company secretary or other authorised person of the company.
In order to determine whether the form CoR25 complies with the above requirements, the day, month and year of the current financial year end, as well as the new financial year end, must be clearly specified on the form.
The fee for a change in financial year end is R100.
No, it is not possible to change the count date for 20X7 as the management can only change the countr dates for future periods only
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