Good Food Ltd Good Food Ltd is a private company set up by Gareth and Gladys Good, 50 years ago.

It manufactures burgers which it sells mainly to fast food outlets. The company relies heavily on 2 major customers: Kingburger and McMurrays. The company has another 20 customers on the sales ledger, but Kingburger and McMurrays account for 60% of turnover. Kingburger have recently told Gladys that they are auditing their suppliers to ensure that the suppliers meet their stringent quality requirements. Good Food has 3 major suppliers (Notsofine Foods, Pakdale and Chevaliers). The company is 100% owned by Gladys Good, who inherited her husbands shares when he died in 2000. She is the sole director. Gladys has no children to inherit the business and has confided to the auditors that she is thinking of selling the business in the near future. None of the members of staff at Good Food are aware of her plans. Your audit firm has been the key auditor for 5 years. The firm has always found Gladys to be honest and reliable. Gladys has a key role in the day to day running of the business. She oversees the production of the company sales material, runs the personnel department (hiring and firing staff and dealing with the payroll) and determines which suppliers the company will use. Turnover is 7million with gross profit at 30% and net profit of 9.5%. Gladys employs a part time bookkeeper (Bill Briggs) to oversee the 2 accounts assistants (Jane and Beth) and to produce monthly and annual accounts. Including these staff members and Gladys, there are 8 admin staff and 50 food production staff. Materiality has been set at 70,000 for this years audit.