Zoom SnowBoards: Audit Planning Document
In-Class Case: October 14, 2013
Zoom SnowBoards: Audit Planning Document
Please work in groups of two.
Read the Zoom Snowboard case (on Canvas). Please stop at page 1205 …just glance through page 1206. Then, please complete the template below. This audit planning case is worth 5% of your grade. It requires you to be familiar with Chapters 6, 8 and 9.
I only need one issue per row. The information must be specific (indicating that you have read the case) and not vague/ambiguous.
While this is an “in-class case”, you may finish this in any other space other than the classroom on 10/14/2013. There will be no “lecture” on 10/14/2013.
Submission date: 10/21/2013.
Potential Issue/Flag
Financial Reporting Risk
Impacts Acceptable Audit Risk or Inherent Risk or Control Risk? (As in increase/decrease)
Account and Assertion impacted?* 1. Macro-economy Issue: Global warming and climate change affecting snow conditions Lower demand, risk for decrease in sales and lower net income creates an incentive for overstated sales and Net Income AAR can decrease as risk of misstatements on the Income Statement increases. External users may rely heavily on reported Net Income. Overstated net income implies assertion of occurrence, completeness and accuracy..
2. Industry issue: Sales’ price gone down to compete with U.S’s market
Increase the incentive to smoothing the net income make the financial statement looks better. AAR can decrease as risk of misstatements on the Income Statement increases. External users may rely heavily on reported Net Income. Overstated net income implies assertion of occurrence, completeness and accuracy.
3. Financing Issue: A requirement to get approval for new line of credit is to have positive Net Income by the end of the year.
Line of credit requirement creates an incentive for overstated Net Income to avoid cancellation.
AAR can decrease as risk of misstatements on the Income Statement increases. External
Zoom SnowBoards: Audit Planning Document
Please work in groups of two.
Read the Zoom Snowboard case (on Canvas). Please stop at page 1205 …just glance through page 1206. Then, please complete the template below. This audit planning case is worth 5% of your grade. It requires you to be familiar with Chapters 6, 8 and 9.
I only need one issue per row. The information must be specific (indicating that you have read the case) and not vague/ambiguous.
While this is an “in-class case”, you may finish this in any other space other than the classroom on 10/14/2013. There will be no “lecture” on 10/14/2013.
Submission date: 10/21/2013.
Potential Issue/Flag
Financial Reporting Risk
Impacts Acceptable Audit Risk or Inherent Risk or Control Risk? (As in increase/decrease)
Account and Assertion impacted?* 1. Macro-economy Issue: Global warming and climate change affecting snow conditions Lower demand, risk for decrease in sales and lower net income creates an incentive for overstated sales and Net Income AAR can decrease as risk of misstatements on the Income Statement increases. External users may rely heavily on reported Net Income. Overstated net income implies assertion of occurrence, completeness and accuracy..
2. Industry issue: Sales’ price gone down to compete with U.S’s market
Increase the incentive to smoothing the net income make the financial statement looks better. AAR can decrease as risk of misstatements on the Income Statement increases. External users may rely heavily on reported Net Income. Overstated net income implies assertion of occurrence, completeness and accuracy.
3. Financing Issue: A requirement to get approval for new line of credit is to have positive Net Income by the end of the year.
Line of credit requirement creates an incentive for overstated Net Income to avoid cancellation.
AAR can decrease as risk of misstatements on the Income Statement increases. External