Audit risk analysis project instructions

Assignment Help Accounting Basics
Reference no: EM13916102

Audit Risk Analysis Project Instructions

The Audit Risk Analysis Project requires the student to assume the role of an audit manager of a public accounting firm. The firm has been asked by an audit partner to assess the acceptability of a company as an audit client.

The project pertains to the following: Pre-PCAOB, there was no required structure to the deliberations that an auditor went through before deciding whether or not to accept a new audit client. Now, the PCAOB requires that an auditing firm have a meaningful discussion among the persons in the auditing firm with decision-making authority before a new audit client is accepted. This is also required before an existing audit client is accepted for another year. The discussion must be documented.

The purpose is to help ensure that an auditing firm does not accept a client for which they do not have the manpower (woman power) or expertise to adequately service. Also, to help ensure that an auditing firm does not find out "too late" that the industry in which the new client operates is a high-risk industry-high-risk is fine only if you are prepared for it.

There are many journal articles out there about the topic of client approval. In the textbooks, look for the chapter on The Auditing Firms Required System of Quality Control or even specifically on approval/acceptance of new or continuing audit clients.

Important note: You may not select Wal-Mart, Target, Lowe's, Home Depot, Ford, or General Motors as the subjects of the Audit Risk Analysis.

This project is to be written in a memo format, summarizing this assessment, and should be 5-7 pages, not including the title or references page. If you choose to include charts &/or ratios, this will count towards the overall page requirement. A minimum of 5 references are required. Only the references page needs to be in current APA format. The project is to be submitted by 11:59 p.m. (ET) on Sunday of Module/Week 7.

Include in the memo the following steps:
1. A brief description of the company, including the history of the company. The Subject Organization can be any company, public or private, including not-for-profit organizations.

2. A clear statement that the potential client should, or should not be accepted. State your conclusions in the first paragraph of the report. Say something such as: "For the reasons given below, I recommend that we accept (or do not accept) ABC Co. as an audit client."

3. Give a brief introductory statement describing the company, its history, and its industry. One or 2 paragraphs should be enough. This introductory statement should be 1 page at the most.

4. The Independent Status of the Board of Directors
a. List the first 5 members of the Board of Directors by name. For these 5 members, list their full-time employer. Look at all the members of the Board of Directors and count how many do not work for the target company. State your findings, such as "Twenty-one of the twenty-five members of the Board of Directors would be considered to be Independent Members by the SEC rules."

5. State whether or not all the members of the Audit Committee are Independent. Give the name of the Chairperson of the Audit Committee.

6. If the client is a public client, the date and purpose of the latest Financial Statement 8-K filing should be given. Specify by date filed the most recent Form 8-K filled by the company. State the subject of the 8-K. (This requirement does not apply if your target company is not a public company)

7. Do not include the financial statements-just the ratios that you think are relevant. Include ratios of a competitor, or of the industry.

Reference no: EM13916102

Questions Cloud

Ethical standards in management communications : Relate an organizational example of the use or lack of use of ethical standards in management communications. The example may be from your own workplace or from a business situation with which you are familiar.
Prepare comprehensive budgets for upcoming second : Since you are well trained in budgeting ,you have decided to prepare comprehensive budgets for the upcoming second quarter in order to show management the benefits that can be gained from an integrated budgeting program.To this end,you have worked..
Did you detect more average-sized men than heavy men : Did you detect more average-sized men than heavy men? Were there more muscular men than average-sized or heavy men? If so, what differences did you notice in the characters they played/products they sold
Positive and negative symptoms of schizophrenia : What interesting questions did the article raise for you? Identify the positive and negative symptoms of schizophrenia and give an example of each
Audit risk analysis project instructions : The Audit Risk Analysis Project requires the student to assume the role of an audit manager of a public accounting firm. The firm has been asked by an audit partner to assess the acceptability of a company as an audit client.
Difficulty in the selection process in clc : CLC assignment- Topic/Issue Selection: Each CLC team may select one topic to discuss. If the group experiences difficulty in the selection process, the instructor may assign the specific topic
Find out how you can be part of our team : Write a cover message for the following job opening: Want to grow with us? Find out how you can be part of our team! Territory managers wanted today!
Annual depreciation charges over the asset : Assume a fiscal year-end of September 30. Compute the annual depreciation charges over the asset's life applying each of the following methods.
Calculate the new scores : Last, you change battery life to a factor of 7 from 10 because it is less important than price, but more important than unit weight and hard drive size. Calculate the new scores. Which low-budget computer wins this time?

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  What are some of the common reasons why the checkbook

1. why should the responsibility for related transactions be divided among different departments or individuals?2. what

  Mclinden corp is considering financing 10000000 of its

mclinden corp. is considering financing 10000000 of its upcoming operations by issuing equity and bonds. mclinden is

  Equivalent production schedule

Medical laboratories. Inc. produces an antibiotic product in its three producing departments. The following quantitative and cost data have been made available.

  Calculate the amounts for mary''s 2009 income tax returns

Mary (age 33) is a single taxpayer with adjusted gross income for 2009 of $21,040. Mary maintains a home for two dependent children and has itemized deductions of $3,000. Calculate the following amounts for Mary's 2009 income tax return:

  A person was considering buying a house priced at 200000 a

a person was considering buying a house priced at 200000. a mortgage company claimed the interest rate for the 20-year

  Abis corporation uses the weighted-average method in its

abis corporation uses the weighted-average method in its process-costing system. this month the beginning inventory in

  Taxes and real estate commission

Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $17M, and production and sales will require an initial $5M investment in NOWC. The company's tax rate is 40%.

  Compute blues materials price variance compute the

the cost accountant for blue pharmaceuticals has informed you that the companys materials quantity variance for the

  Unique ability to recognize user needs

The viewpoint has been expressed that financial statement preparers are also the largest class of users of financial statements. Hence, the preparer has a unique ability to recognize user needs that the FASB does not really appreciate.

   the depreciation expense will appear in which of the

the depreciation expense will appear in which of the following worksheet statement columns? a the income statement

  Sale of property received as a gift during the current year

sale of property received as a gift. during the current year stan sells a tract of land for 800000. the property was

  Adjusting entries by using good form

Prepare the adjusting entries using good form for each of the following situations as of January 31 (measurement date) for the one month of January

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd