P 4-5

   b  

1.

The significant accounting policies, which management believes are appropriate for the company, are described in Note X to the financial statements.

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2.

The financial statements of Acme Supplies Ltd. have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued the International Accounting Standards Boards (IASB).

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3.

Management has established systems of internal control that are designed to provide reasonable assurance that assets are safeguarded from loss or unauthorized use [. . .]

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4.

The board of directors is responsible for ensuring that management fulfils its responsibilities for financial reporting and internal control.

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5.

When preparing the financial statements, management undertakes a number of judgments, estimates, and assumptions about the recognition and measurement of assets, liabilities, income, and expenses. Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income, and expenses is provided below. Actual results may be substantially different.

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6.

The mortgage is payable to Last Chance Bank. It bears interest at 5% per year and is amortized over 20 years.

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7.

[. . . ] the accompanying financial statements of Acme Supplies Ltd., which comprise the balance sheet as at December 31, 2018, the income statement, statement of changes in equity, and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

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8.

An [. . .] involves performing procedures to obtain [. . .] evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the [. . .] judgment, including assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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9.

The accompanying financial statements of the company are the responsibility of management.

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10.

Revenue arises from the rendering of service. It is measured by reference to the fair value of consideration received or receivable.

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11.

The bank loan is due on demand and bears interest at 4% per year. It is secured by real estate of the company.

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12.

The audit committee reviews the annual financial statements and reporting to the board, and makes recommendations with respect to their acceptance.

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13.

Management recognizes its responsibility for conducting the company’s affairs in compliance with established financial standards and applicable laws, and maintains proper standards of conduct for its activities.

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14.

My responsibility is to express an opinion on the financial statements based on my audit.

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15.

Estimates are necessary in the preparation of these statements and, based on careful judgments, have been properly reflected.

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16.

I believe that the [. . .] evidence I have obtained is sufficient and appropriate to provide a basis for my [. . .].

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17.

Land held for use in production or administration is stated at cost. Other property, plant, and equipment are initially recognized at acquisition cost plus any costs directly attributable to bringing the assets to the locations and conditions necessary to be employed in operations. They are subsequently measured using the cost model: cost less subsequent depreciation.

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18.

In making those risk assessments, [. . .]considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design [. . .]procedures that are appropriate in the circumstances

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19.

The share capital of Acme Supplies Ltd. consists of fully-paid common shares with a stated value of $1 each.

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20.

The principal activity of Acme Supplies Ltd. is the retail sale of merchandize.