NAME: INSTITUTION: COURSE: INSTRUCTOR: DATE: Keystone Computers & Networks- Audit Plan Purpose: To depict services that the client will receive. Objectives: 1. appraisal of KCN's financial statements for the financial year 12/31/X5 2. Issue a letter regarding conformity with promises on the letter of credit contract. Conditions of the Business and Industry Purpose: Explain the business carried out by KCN as well as the industry in general. Content: KCN is involved in installation and sale of computers and computer accessories to trade customers. The industry is very competitive and responsive to economic circumstances. For KCN to succeed in future it must be able to recruit and retain personnel with IT qualifications. There is a 3% projected annual growth for the next 3 years in spending on IT products and services. Meetings plan Purpose: To designate meetings between CPA engagement team and the client. Content: Currently there has been one production costs could have contributed to the gross profit variations over time. Therefore it could be deduced that the significant differences that are represented by different ratios in different periods could have resulted from varied profitability of the company. References Gornik-Tomaszewski S. & Millan M. A. (2005). Accounting for research and development costs. Review of Business 26(2) 42 Whittington R. & Pany K. (2010). Principles of auditing and other assurance services. Lev B. & Sougiannis T. (1996). The capitalization amortization and value-relevance of R&D. Journal of accounting and economics 21(1) 107-138. Statement of Financial Accounting Standards No. 2: Accounting for Research and Development Costs. (1974). Retrieved from www.fasb.org of Financial Accounting Standards No. 86: Accounting for the Costs of Computer Software to Be Sold Leased or Otherwise Marketed. (1985). Retrieved from www.fasb.org Jr M. Glover S. & Prawitt D. (2016). Auditing and assurance services: A systematic approach. McGraw-Hill Education. [...]
The final paper will be based on Appendix 6C Illustrative Audit Case: Keystone Computers at pages 237-244 in your text. Write, in outline format but in complete sentences, a 6 to 10 page audit plan. It is recommended that you look at Figure 18.8 on page 708, which shows the control objectives related to accounts receivable. In your audit plan cover the steps necessary to determine if you should select the client, the internal control procedures which need to be reviewed, the substantive tests [using accounts receivable a guide], and the final reporting steps. Based on the actual facts in the case determine the emphasis you want to place on various accounts. Also reflect back over your entire accounting program and think about how the accounts are interrelated. For example, when allowance for doubtful accounts is credited the offset is to bad debt expense. Therefore one of the steps should be to trace the debit side of the entry to the balance for bad debt expense. Make your comments as specific as possible. Rather than say look for unusual entries, say look for entries from unusual sources and rounded amounts with focus on those near an accounting cut off. Use precise language. Rather than saying you “vouched accounts payable,” say that you looked at the item to determine that it was a bona fide business expense. Remember to focus on the key audit objectives and support needed after applying the audit risk model. Remember, the purpose of the Final Paper is for you to culminate the learning achieved in the course by describing your understanding and application of knowledge in the field of accounting. The Final Paper should focus on real life, real time application of topics covered in this course; the uses you have seen and the uses you can envision. The paper must be submitted to your instructor no later than the last day of class. Earlier submittal is appreciated.