Pinnacle Manufacturing Case

Knowledge about risks related to the company evaluated as part of the auditor 's client acceptance and retention evaluation; and the relative complexity of the company 's operations. ( Auditing Standard No. 9 //. (n.d.).

1. Planning and risk assessment: In order to access the risk of Smackey’s, the auditors would have to make sure they understand what type of business and the business industry of Smackey; a good review of Smackey’s internal controls would need to be addressed; and an assessment of transaction related audit object which consists of occurrence, completeness, accuracy, classification, timing, posting, and summarization.

This course is the first in a two-part series that deals with auditing a company 's financial reports, internal controls, and

3. How should the acquisition of MPIS be financed, taking into account the issues of control, flexibility, income and risk?

"In applying analytical procedures as risk assessment procedures, the auditor should perform analytical procedures relating to revenue with the objective of identifying unusual or unexpected relationships involving revenue accounts that might indicate a material misstatement, including material misstatement due to fraud. Also, when the auditor has performed a review of interim financial information in accordance with AU sec. 722, he or she should take into account the analytical procedures applied in that review when designing and applying analytical procedures as risk assessment procedures."

CAS 300 requires auditors to their audit using a risk based model where the nature, timing and extent of audit procedures are based on the assessed risk of material misstatement. Pickett (2006) argues that for audits to be effective and efficient, much of the audit effort should be focused on areas that are considered to pose the highest audit risk. Additional audit procedures should be linked to individual audit assertions whereas other audit procedures need to be performed as and when needed. Thus, for an audit plan to be put in place, it is necessary for an auditor to come up with a risk profile of the client comprising an understanding of the business operating by the audit client, assess business risk and also perform its preliminary analytical review.

Two main risks need to be considered with this acquisition. The first risk is the contingent liabilities arising from Elson’s compensation and accumulated earnings from PTI’s interest-earning assets. Lane should provide the bank information on the accountant’s opinion on these contingent liabilities as rationale the bank’s valuation needs to discount them from their asking price.

Write an 8 to 10 page Case Analysis of the following article (which can be found in the Ashford Online ProQuest database):

The audit team focused on preforming groundwork analytical procedures. A comparison of the performance of Smackey’s Dog Foods Inc to other similar industries was used to validate the original assessment of the risks. Performing the procedures helped detect areas that pose a high risk of the material misstatements. Another important part of the planning of the audit was to set a balance of materiality that is appropriate. The situations that

The primary users will be the Japanese lumber company who is interested in purchasing CFCL, and the owner, Don Strom. The purchaser will depend on the financial statements to assess performance of the company. However, they will most likely focus on inspection of CFCL’s timber assets to value the company and the purchase price. Strom will be looking at the statements to ensure proper management performance, and that net income is not overstated, to reduce bonus and tax payouts. The Controller will also hold a bias to inflate net income to increase his bonus. Attention should be given to ensure his new policy suggestions are not for his own benefit, but the benefit of CFCL and Strom. Accounting alternatives and recommendations in relation to the issues and new policies will be discussed.

| The objectives are (1) audit of KCN’s financial statements for the year ended 12/31/05, and (2) issuance of a letter on compliance with covenants of the client’s letter of credit agreement.

Create a professional report detailing the information above as an initial draft of the risk

|Develop Audit programs for the substantive audit procedures for the balance sheet and income statement |35 |

(If the company produce the BB first, the company will buy 4000 labor hours, and it will use 2500 for BB and the remaining hours to produce WRM = 1500.

1. Your firm has an employee who reads and saves articles about issues that may affect key clients. You read an article in the file titled, “EPA Regulations Encouraging Solar-Powered Engines Postponed?” After