Solution 1 Case 6 Preparing Audit Plans Background Consider each of the following situations SEPERATELY since they are independent of each other Required
Solution Case Preparing Audit Plans Background Consider each of the following situations SEPERATELY since they are
Solution Case Preparing Audit Plans Background Consider each of the following situations
Plans Background Consider each of the following situations SEPERATELY since they are independent of each other Required
Solution Case Preparing Audit Plans Background Consider each of the
following situations SEPERATELY since they are independent of each other Required
Solution Case Preparing Audit Plans Background Consider each
Solution Case Preparing Audit
(Solution) 1 Case 6: Preparing Audit Plans Background: Consider each of the following situations SEPERATELY since they are independent of each other. Required:...

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This is a case study. I attached the file that is needed.1 Case 6: Preparing Audit Plans Background:   Consider   each   of   the   following   situations   SEPERATELY   since   they   are  independent of each other.  Required:   Assume you are responsible for the preparation of an audit plan in each of the  situations discussed below. In each case, describe how the situation posed would affect your  audit plan and risk assessment. Include information regarding the nature and/or extent of audit  evidence to be collected. REMEMBER when you are providing an opinion on how the situation  affects your audit plan, also include information that supports your stated opinion. Please  paraphrase all sources and provide cites of sources used. a. Your audit plan for sales places extensive reliance on internal controls and the use of  substantive analytical procedures. Your testing of the internal controls for sales has found a  significant number of instances where clients' credit ratings have not been checked and  abnormally large discounts have been given. The sales manager states that these changes  have been the result of difficulties in maintaining sales levels. b. You are planning the annual audit engagement of a tractor retailer. You are aware of  significant problems in the rural industry over the past six months and little improvement is  in sight. c. Since the last audit your client has introduced a new management compensation scheme  with the result that top managers' salaries are closely tied to the company's profitability. d. Management informs you that during the year the internal auditors discovered that a  substantial amount of   stock had disappeared from a small branch of your client. A number of  local managers have subsequently resigned although there were no prosecutions. The losses  equaled 1% of the company's profit before income tax expense. e. Since your last audit the client has introduced a new IT system for inventory to replace the  old manual system. Management has indicated that the big advantage of the new system over  the old one is that it provides information on inventory levels and gross margins for both  product lines and geographical area. f. A new competitor of your client entered the market two months before year end and, since  that time, selling prices have fallen significantly. Your inquiries have revealed that the  industry expects heavy discounting to continue for the whole of next year. g. There were no major disposals nor additions to plant and equipment during the period. Plant  and equipment is not a material balance and consists mainly of furniture and fittings. Formatting:   As indicated in the syllabus, your response should not exceed 2 single spaced pages. Please review  your syllabus for all other formatting and submission guidelines. The due date for this project is also  indicated on your syllabus.

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