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Question
Juniper Berry is a private company, operating in the fruits and vegetable industry, located in the Niagara region. In its main St-Catharines plant, it receives the picked berries and proceeds to sort, package and also make some related products such as jams, cookies and pies. Your firm has recently been hired as the auditor of Juniper Berry. The partner in charge of the audit has asked you to write a memo explaining why it is important to gain understanding of the business operations and processes of Juniper Berry and also to list some suggested procedures to be performed in the process of understanding the business operations and processes.
To assist you with your memo, the partner provided you with some notes he took at a recent meeting with the management of Juniper Berry.
- Juniper Berry (JB) sells and manufactures a wide range of products. From fresh to frozen berries, to jam, cookies and pies. Fresh and Frozen berries make up most of the revenues of JB.
- JB sells mostly to grocery stores directly. Its frozen berries however are packaged with the Mondo Grocers logo as they have an exclusive contract to sell all of their frozen berry production to Mondo.
- In 2011, JB installed a high tech scale system where the berries received from the various farms are weighed when they are delivered and the amount to be paid to the farmer is calculated and recorded immediately. The system automatically records the inventory and the central system also issues an electronic payment for the amount calculated by the scale. JB is proud to be technologically advanced as it allowed the company to cut some jobs and be more cost efficient.
- Given that most of the packaging and processing of berries into derived products is automated, capital assets represent a significant portion of the balance sheet and also required JB to obtain large bank loan in 2011 when the plant upgrade took place.
Answer
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