Audit Risk Analysis

Topics: Financial ratios, Financial ratio, Generally Accepted Accounting Principles Pages: 10 (2716 words) Published: February 23, 2011
Audit Risk Analysis Project – Bebe, Inc.
Liberty University
ACC 622 Advanced Auditing
Due May 7, 2010

Table of Contents

Memorandum ...................................................................................................................3 History ............................................................................................................................. 4 Product Offering .............................................................................................................. 4

Product Offering .................................................................................................. 4 Officers ............................................................................................................................ 5 Members of the Board...................................................................................................... 5 Introduction ..................................................................................................................... 6 Recent Developments ...................................................................................................... 6 Key Items ......................................................................................................................... 7 Financial Condition ......................................................................................................... 8 Financial Ratios .............................................................................................................. 11

Significance of Ratios ......................................................................................... 12
Conclusion ...................................................................................................................... 13 References ...................................................................................................................... 14

memorandum
to:TEACHER NAME
from:LAQUITA BASNIGHT
subject:AUDIT RISK ANALYSIS
rEFERENCE: bebe, Inc.
date: [ 5/7/2010 ]

I have systematically used information derived from the company and the Securities and Exchange Commission (SEC) to assess the risk of accepting bebe, Inc. as an audit client. My research was based on careful analysis of recent developments and key items including management compensation plans tied to reported profits.

The financial condition of the company included a comparison of the financial ratios of Bebe against the industry. This analysis was designed to provide a framework for assurance in the performance of an audit.

The risk assessment included a systematic identification of areas of concern. In other words, it's an analysis of what could go wrong. Some are more likely to occur than others; some will have a greater impact than others. Finally, having identified and assessed risk, my recommendation is that we accept bebe, Inc. as an audit client.

Laquita Basnight

Enclosure: Supporting documentation.
History.
bebe was founded by Manny Mashouf, its current Chief Executive Officer and Chairman of the Board. The first store opened in San Francisco, California in 1976, which was also the year of incorporation. As of July 4, 2009, there are 211 bebe stores in 35 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Canada. As of July 4, 2009, there are 34 2b bebe stores in 12 states, Puerto Rico and Canada. As of July 4, 2009, there are 62 bebe sport stores in 17 states, Puerto Rico and Canada.

bebe comes from the philosophy of "to be or not to be" which was the feeling of the 1970s decade, in which the company was founded (bebe, 2010). Having discovered a demographic at was neither junior nor matronly, Mashouf aimed to break the mold by offering the stylish women of this under-represented population with distinctive and inspirational fashion. Product Offering.

bebe designs, develops and produces a distinctive line of contemporary women's...
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