WMC_Analytical_review_in_planning - Wire Manufacturing...

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Wire Manufacturing Company Issue Analytical review during the planning stage of an audit. Background You are a senior auditor assigned to the Wire Manufacturing Company (“WMC”) audit. This is the first year your firm has conducted the audit of this particular client. In fact, although WMC has previously engaged accountants to perform limited review services for the purpose of obtaining bank loans, this is the first year WMC has contracted a full scale audit of their financial statements. The company plans on an initial public offering (IPO) of its stock in the next two or three years and has hired your firm to conduct its first financial statement audit in preparation for the upcoming IPO. WMC is a medium-size company that buys and sells copper rods and plastic material used to make insulated copper wiring. WMC operated out of a single building complex totalling 500,000 square feet, which includes office space (3%), production area (57%), shipping and receiving (15%), and finished goods and raw material inventory warehouse (25%). WMC supplies insulated copper wiring to Ontario and Quebec. The company has a good reputation for quality products and has had a good working relationship with its outside accountant over the past 10 years. You have been assigned responsibility for auditing WMC inventories. You are in the planning stages of the audit, and you are preparing to conduct some analytical procedures to help you identify risk areas that may require further attention. Your staff assistant assembled information relating to inventories and other items,
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This note was uploaded on 11/23/2009 for the course AFM 480 taught by Professor Gb during the Spring '09 term at Waterloo.

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WMC_Analytical_review_in_planning - Wire Manufacturing...

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