Kpmg Case Study Essay

975 Words Jul 27th, 2013 4 Pages
Using Analytical Procedures as Substantive Tests By Frank A. Buckless and D. Scott Showalter, NC State University

Case Study: Majestic Hotels, Inc.

Case Study: Majestic Hotels, Inc.
Using Analytical Procedures as Substantive Tests
By Frank A. Buckless and D. Scott Showalter, NC State University

BACKGROUND
Majestic Hotels, Inc., a privately-held company, has four hotels located in Charleston, South Carolina; Asheville, North Carolina; Savannah, Georgia; and West Palm Beach, Florida that cater to high-end business and vacation travelers. Bank-loan covenants require that Majestic Hotels, Inc. submit audited financial statements annually to the bank. Specifically, the bank covenants contain revenue and occupancy measures that
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While obtaining background information about the client, the staff person learned from the Asheville hotel manager that the Asheville hotel was closed for one week in October because of flooding. Amanda has assessed inherent risk as high and control risk as low for the existence, completeness, and accuracy of sleeping room revenues based on challenging but improving regional and national economic conditions and favorable control procedures associated with sleeping room revenues. Further, after
© 2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. © 2012 Frank A. Buckless and D. Scott Showalter

Using Analytical Procedures as Substantive Tests By Frank A. Buckless and D. Scott Showalter, NC State University

Case Study: Majestic Hotels, Inc.

considering the degree of precision required and both quantitative and qualitative factors, Amanda believes that a difference between the expected amount…

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