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    High-Risk Audit Areas

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    Please help me Write a paper of approximately 750-900 words that answers the following:

    In preparation for the meeting with the potential client's CFO, you plan to identify several high-risk audit areas in the company's financial statements that you will discuss. Using the company's latest annual report, pick at least three areas that you consider high risk, and consider the overall audit strategy and procedures that you would employ in those areas, including tests of controls and substantive procedures. Write a memorandum on each area, explaining why the area is high risk, and the types and extent of procedures you plan to use during your audit. Any company can be selected.

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    Solution Preview

    High-Risk Audit Areas

    Introduction: Hello, I will try and provide you with some good information for completing your assignment. I will follow my normal routine, which is designed to provide you with a step-by-step approach to providing you with the necessary information.

    1. "Identify several high-risk audit areas in the company's financial statements." I will start with a discussion of some high risk audit areas that professional accounting officers feel are important. When you finally get to the point of developing your response to your assignment, it should not be too difficult to select some high risk audit areas.

    A. Properly recognizing organizational revenue. A primary focus of auditing personnel is the proper documentation of organizational revenue. Questions that will be asked include,
    1. Was the revenue posted in the correct reporting period?
    2. Is there correct source documentation for revenue?
    3. Are there managerial statements concerning any material errors in documenting revenue?
    4. What are control features to ensure proper revenue documentation (Tysiac, 2014)?

    B. Is the organization a going concern? In other words, what is the potential for the organization to have the financial resources to continue operations (Tysiac, Auditors still responsible for going-concern evaluation under PCAOB rules, 2014). An auditor is responsible to report any documentable indication that an organization does not have the financial resources to meet its financial responsibilities.

    C. Auditors are responsible for ...

    Solution Summary

    This response briefly considers a very serious and complex set of issues. Several resources were provided for the student's consideration. The key to remember is that Federal regulations require organizations to establish sufficient internal financial controls to ensure that all of the organization's financial operations are correctly accounted for. Auditors have a fiduciary responsibility to report material errors in an organization's financial reports. High risk areas apply to organizations of all shapes and sizes.

    $2.19