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In the audit plan for the audit of Keystone Computers & Networks, Inc., there is a section on significant accounting and auditing matters. The second matter described involves capitalizing the costs of developing a software program for sale.
Research this issue and write a brief memorandum for the working papers describing the issue and summering the appropriate method of accounting for the development costs.
Based on your research, describe the major audit issue that you believe will be involved in auditing the software development costs.
A partially completed analytical ratios working paper for Keystone Computers & Networks, Inc., is presented on page 241 of the attached case study.
Complete the working paper by computing the financial ratios for 20X5 and provide these in your paper.
After completing part a, review the ratios and identify financial statement accounts that should be investigated because the related ratios are not comparable to prior-year ratios, industry averages, or your knowledge of the company. Provide these in your paper.
For each account identified in part b, identify and discuss potential reasons for the unexpected account balances and related ratios.

Your essay should total 4-6 pages in length and be well written and in conformity to CSU-GC specifications regarding style.