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INTEGRATED CASE APPLICATION—PINNACLE MANUFACTURING: PART I8-40 (Objectives 8-3, 8-4, 8-5)IntroductionThis case study is presented in seven parts. Each part deals largely with the material in thechapter to which that part relates. However, the parts are connected in such a way that incompleting all seven, you will gain a better understanding of how the parts of the audit areinterrelated and integrated by the audit process. The parts of this case appear in the followingtextbook chapters:• Part I—Perform analytical procedures for different phases of the audit, Chapter 8.• Part II—Understand factors influencing risks and the relationship of risks to audit evidence,Chapter 9.• Part III—Understand internal control and assess control risk for the acquisition and paymentcycle, Chapter 10.• Part IV—Conduct fraud brainstorming and assess fraud risks, Chapter 11.• Part V—Design tests of controls and substantive tests of transactions, Chapter 14.• Part VI—Determine sample sizes using audit sampling and evaluate results, Chapter 15.• Part VII—Design, perform, and evaluate results for tests of details of balances, Chapter 16.Background InformationYour audit firm has recently been engaged as the new auditor for Pinnacle Manufacturing