Audit Planning And Control Of The Audit

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Audit Planning and Control Robert Dorsey Dawn Carter ACC 401 Auditing I November 30, 2014 This is a very critical area of audit process that is done at the beginning of the process to make sure that suitable attention is committed to essential areas, (Pickett, 2006); at this stage likely problems are identified in time to facilitate proper job coordination and expeditious completion of jobs. The paper will use The PricewaterhouseCoopers as the audit firm while the client firm will be Lockheed Martin Corporation. The auditor must identify the objective of auditing and commence a strategy for starting the outline and strive to minimize the audit risk to the least possible levels. An auditor will perform certain procedures…show more content…
Profitability ratios are these ratios shows the productivity of the firm by dividing net profit before tax by the total value of capital employed to find out how the level of return on the capital employed. Net profit ratios can also be used to evaluate a firm’s profitability. This can be achieved by dividing net profit before tax by sales and then comparing the value with the same ratio for financial period and with the values of competing firms, (Puncel, 2007) The auditing process will involve the following analytical procedures; comparing the client performance with the data of the industry it operates, comparing the client’s data with similar previous data, compare the client’s data with client’s predetermined or expected results, evaluating the client’s data with expected results but using nonfinancial data and contrasting the client’s data with results that are expected predetermined by the auditor, (Kogan et al, 2010). The ratios will be used to test the major accounts of the business; it will involve the cash and bank accounts, sales accounts, inventory accounts, purchase accounts, the balance sheet, profit loss and trading accounts and cash flows Analysis of Lockheed Martin Corporation Balance Sheet and Income Statement Lockheed Martin Corporation Consolidated Statements of Earnings (in millions, except per share data) Years Ended December
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