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Auditing Burlingham Bees Essay

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Burlingham Bees 1. AU 329 a. Based on the standards, describe the guidelines for developing an expectation and conducting analytical procedures when those procedures are intended to provide substantive evidence (para. 9-22). i. .09 Reliance on substantive tests: may be derived from tests of detail, from analytical procedures, or from a combination of both. The decision about which procedure to use is based on the auditor’s judgment. ii. .10 Level of assurance: analytical procedure may provide effective level of assurance for some assertions, but some of the assertions may be more effective to reach desired level of assurance by using test of details. iii. .11 Identifying potential misstatement: identifying …show more content…

Monthly amounts will generally be more effective than annual amounts and comparisons by location or line of business usually will be more effective than company-wide comparisons. The level of detail that is appropriate will be influenced by the nature of the client, its size and its complexity. Generally, the risk that material misstatement could be obscured by offsetting factors increases as a client's operations become more complex and more diversified. Disaggregation helps reduce this risk. 2. a) Develop a precise expectation, using the detailed or disaggregated data provided, for ticket revenues for the 2008 fiscal year. Weekend 25% more than weekday: X= weekday attendance per game 1.25 X = weekend attendance per game 10% more attendance with promotion Weekday attendance= (7*1.1*X)+(43-7)*X=43.7 X Weekend attendance= (10*1.25X*1.1)+(29-10)*1.25X=37.5X Attendance equation= [(7*1.1*X)+(43-7)*X]+[(10*1.25X*1.1)+(29-10)*1.25X]=434348=total attendance X= =434348/81.2=5349.1133 43 + 29 = 72 games in 2008. 434348/72 = 6,032 people per game 6032 X .25 = 1508 1508 + 6032 = 7540 ( 25% increase in weekend games) 7540 (29) + X (43) = 434348 X = 5016 (avg. attendance per weekday game) total sales per weekday game: 5,016 * .30 = 1,504.8 * 10 = 15,048 5,517.6 * .30 = 1,655.28 * 10 = 16,552.8 5,016 * .35 = 1,755.6 * 6 = 10,533.6 5,517.6 * .35 = 1,931.16 * 6 = 11,586.96 5,016 * .20 = 1,003.2 * 4 = 4,012.8 5,517.6 *

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