Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Proposal to review House of Lannister financial statements

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Going Concern has publicized the recently released financial statements for HBO’s Game of Thrones:  House Lannister’s Balance Sheet (Unaudited) Isn’t Looking So Hot.

The balance sheet was published by FloQast – Game of Thrones: The House of Lannister’s Financial Statements

You can find the balance sheet and notes here: Season 4 financial statements –

Leaked documents

In the interest of further extending the discussion of the financials, I am publishing below an internal e-mail sent to me anonymously by a senior manager in an eighth tier accounting firm here in the U.S. His (or her) firm is considering submitting a proposal for a review.

The memo, with names redacted:

Memo to: _______, Managing Partner & Client Acceptance Committee

Request your concurrence before proceeding further on preparing a proposal in response to the RFP from House of Lannister.

A compilation has already been prepared. One concern is the comp report refers to both the Seven Kingdoms of Westeros GAAP and Iron Throne Accounting Principles. Any insight as to which actually applies? Notes refer to ITAP which appears be an appropriate financial reporting framework.

I would need to brush up on the Westeros Institute of CPAs version of SSARS before proceeding. Must admit I’m a bit rusty on their rules. I hear tell WICPA is proposing a merger with the Seven Kingdoms Institute of Management Accountants.

I am concerned about the exchange rate of US$288 to 1 Gold Dragon. The formula is okay: 100 Gold Dragons = 12 barrels of expensive wine. Calculated as 12 barrels x 300 bottles per barrel x $8 discounted price / 100 = US$288. Would be stretch to consider US$ the reporting currency but I can live with that. Concur?

I think the discount from $20 per bottle retail to $8 in volume is a bit steep. Suggestions? I understand some members of the acceptance committee have experience buying good wine in multi-barrel volumes. Is that a reasonable discount? Or will we need to request #FloQast recast the entire balance sheet? BTW, I’ve not heard of that firm before. Anyone talked to them at state society meetings?

Keep in mind we can only do a review; an audit would be problematic for multiple reasons. A review consists of inquiry and analytical review. The analytics will be fine. We can handle that. It’s just a balance sheet.

My concern is the inquiries.

A precondition of accepting the review engagement would be considering whether management has integrity. It will require more than our usual level of flexibility on that point. There are reports the House may use a higher level of deception than typical for our client base. Some people I chatted with think the senior leadership is somewhat scheming.

The deeper concern is whether we can rely on responses from a fictional CFO and CEO.  Therein lies my worry. Would the comments from a make-believe controller be just make-believe? That might be a QC problem and issue for our next peer review.

I believe we can complete this engagement from the office. We won’t need to send any staff to the field. That would also be problematic.

Your recommendation? Proceed with due diligence or drop the issue? Remember we have been wanting to expand our reach into Europe and reaching across cultures is part of our strategic plan.

Have not yet received any replies from my initial e-mails requesting some additional information from the CFO. Can’t seem to find any phone numbers online. Or a web site. Or a street address. They don’t seem to have any presence on social media.

Please reply by COB Thursday.

So that is the memo someone sent me. Will keep you posted if I get anything else.

P.S. I just might already have my April Fool 2017 post written!

Written by Jim Ulvog

April 29, 2016, 15:29 pm at 3:29 pm

Posted in Other stuff

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