Audit Planning
The author of this report has been asked to select a publicly traded company for the purposes of a hypothetical scenario. As part of this scenario, the author will outline and identify the critical steps that will be necessary for an audit program associated with a review of the selected firm. There will be the analysis of at least two performance ratios for the company and it will be detailed what tests would or should be used to calculate and evaluate those ratios effectively. In total, there would be at least three analytical procedures used to evaluate those two or more ratios. There will also be a review of the balance sheet and income statements for the company in question and the associated evidence collection that would go into verifying the authenticity and accuracy of the information. The report will conclude with a discussion of the audit risk model and what the primary responsibilities of an audit firm would be if the ending report was an unqualified audit report. While Apple Corporation has been a bit of a juggernaut in recent years, there are some signs of potential issues in their financials.
Analysis
As clearly indicated by the thesis statement, the firm that will be analyzed as part of this report is Apple Corporation. The critical steps that would be necessary are fairly basic in nature but attention to detail is paramount. First, data collection must be complete, it must be from reputable sources and it must be scoured for things that are missing, suspect or otherwise not proper. Doing this correctly, even in the era of GAAP and IFRS as they are currently constructed, can be difficult because companies wield and use accounting standards differently based on the situation, what is going on and the financial shape that they wish to portend. This is not to say that public companies are always devious when it comes to using the standards to their advantage. Rather, they sometimes position information positively when there is some amount of detail that needs to be fleshed out so as to be ethical to investors and analysts, the former in...
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