Case 8.3 Burlingham Bees

Topics: Arithmetic mean, Expected value, Expectation Pages: 2 (419 words) Published: April 10, 2011
Bees’ reported revenue would have to be within $100,000 or a little more for it to be considered reasonable or fairly stated. There could be a number of reasons reported ticket revenues may be outside the reasonableness range”. Simply put, I could have figured the expected revenue incorrectly with the information I was given(which could make me completely off in expectations. The allocation of tickets per weekend and weekday as I assumed, could have been different in the actual numbers for each day. I just assumed that the average per day was the same, taking in to account the increases due to promotions and weekends. None of the information reported weather conditions for any certain day, which could significantly lower any of the numbers of people per...

3a)The Bees’ reported ticket revenue would have to be within $10,000-$11,000 for me to believe that the ticket revenues are reasonable and fairly stated. The tolerable difference should always be less than the overall materiality in the audit, which I calculated at about $13,500 averaging two different benchmarks. Also, I believe that because ticket revenues are the most significant part of this business, along with the broad level of information used in my analysis, the tolerable difference here should be lower than overall materiality but cannot be low because of the information used to calculate my expectation.

3b)If reported ticket revenues were outside a reasonable range of the auditor, depending on the difference, the discrepancy could be explained several different ways. The causes of differences are typically accounting changes, economic conditions or events, error, or fraud. No accounting changes or economic conditions exist that the case makes me aware of, although the park could have possibly experienced problems that related to the accounting for ticket revenues. The total park attendance could have been counted erroneously, and over a period of 72 games, the miscounting could have...
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