Corporate Analysis and Audit Plan paper
Paper , Order, or Assignment Requirements
- Complete the Corporate Analysis and Audit Plan paper,
- When writing this report, follow the outline as closely as possible.
- Adhere to APA formatting.
- Recommended title sections of the written report include:
o Overview of Company and Annual Report
o Assessment of the 10-k Report
o Business and Industry
o Financial Analysis, Broad Audit Plan
o References and Appendices
o Subtitles are also welcome
- Additionally, the report should include graphic displays and bullet points where beneficial and most appropriate. Place large displays or lists in the Appendix section. Also, be sure to include a cover page. NOT TO EXCEED 1 PAGE THAT I AM PAYING FOR
- The introduction to the paper should have two paragraphs: (1) identifying the team members and their approach to the audit plan and (2) identification of the target company and summary of the audit plan project. Include a minimum of five reference sources. A lengthy report is not the aim of the project. In fact, most of the questions can be addressed using 1 or 2 paragraphs. What is required is a clear, concise, but substantive, detailed audit plan.
IMPORTANT: This is not simply a report ABOUT a company. It is an ANALYSIS of a corporation traded on the stock market for the purpose of proposing a generalized AUDIT PLAN. Be sure to rely upon and include auditing concepts, as appropriate.
ASSIGNMENT – Corporate Analysis and Audit Plan 1
The objectives of this project are as follows:
- To acquaint students with the annual report and Form 10-k of a publicly held company audited by a CPA firm.
- To provide data for the practical application of certain steps in the audit process.
- To allow students to experience working in teams to plan an audit, as is done in actual auditing practice.
- Obtain a copy of a recent annual report of a publicly held company with stock actively traded on the New York, NASDAQ or other over-the-counter exchanges (refer to notes for Workshop One). Answer the following questions:
- What is the company’s industry?
- What are its primary products or services?
- What raw materials does the company use, if any?
- How large is the company:
- Where is the company located?
- What other people/companies are closely associated with this company?
- Look at the annual report:
- What image does it intend to convey?
- What are the segments and functional contents of the report?
- Obtain a copy of the Company’s 10-k report for the same date as the annual report. Answer the following questions:
- If the company has a 10-k that is not also its annual report: How does the 10-k differ from the annual report? Supplement the answers to the questions under #2 as appropriate.
- If the annual report is the 10-k report, explain why you think the company uses the 10-k instead of an annual report. Compare to at least one other competitor’s annual report. Do they also use the 10-k?
- Supplement the answers to the questions under 2, as appropriate.
- Obtain outside information about the company and its industry. Answer the following questions:
- What are the key economic factors about the industry?
- Where is the company in its life cycle?
- What are the five or six most important factors for success in this business?
- How does this company stand with respect to these factors?
- Describe four or five key business risks related to the client’s business and industry.
- What notable accounting considerations are there for companies in this industry?
- What legal or regulatory matters are of concern?
- What social matters are of concern?
- Analyze the company’s financial strength:
- Assess the financial strength of the company.
- How is the financial strength likely to change in the next year or so?
- What are its sources of capital and what is the value of the company’s capital?
- How have capital markets responded to the company in the last year?
- What is the quality of earnings?
- How does the company compare with others in the industry?
- Prepare a broad audit plan:
- What material types of transactions and transaction cycles are involved?
- What are the high-risk areas?
- What are the low-risk areas?
- If management faced tremendous pressure regarding the entity’s financial performance, what opportunities might exist for them to engage in fraudulent financial reporting?
- To what extent do you believe it will be appropriate to reduce assessed control risk?
- How will the audit effort be allocated among geographical areas?
- Will any areas of the audit require outside expertise?
- Will there be reliance on an internal auditor(s)? If so, why? If not, why not?
- What form of auditor’s report do you expect will be issued? What does it mean?