Week 4 - Individual Assignments

Week 4 - Individual Assignments - Week 4 Individual...

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Week 4 – Individual Assignments – David Trejo 1 Week 4, individual assignments Ch. 8: Comprehensive Questions 8-16 – Analytical procedures 8-16 (Analytical procedures)  In audit planning the audit of Circuits Technology, Inc. (CTI). CTI resells, installs, and provides computer networking products (client software, gateway hardware and software, and twinax hardware) to other businesses. Figure 8-14 provides some summary information from CTI’s financial statements. Required a. Calculate purchases, gross margin, inventory turn days, accounts receivable turn days, and accounts payable turn days for the years ended 20x2, 20x3, 20x4, 20x5. 20x2 20x3 20x4 20x5 Purchases: $ 2,993 $ 2,171 $ 1,827 $ 1,883 Gross Margin: 52.3% 48.1% 52.2% 52.4% Inventory turn days: 160 185 199 199 A/R turn days: 70 97 95 83 A/P turn days: 33 51 43 36 b. Describe the trends identified by performing analytical procedures in the gross operating cycle, the net operating cycle, and gross margin. The identified trends from performing analytical procedures are: the expected range for inventory turn days is 7.94, an improved collection period, an increase in inventory turn days, and an increase in gross margin. The trends indicate that there was an increase in gross margin and a purchasing decrease, signaling that inventory was overstated.
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Week 4 – Individual Assignments – David Trejo 2 Ch. 10: Comprehensive Questions 10-32 – Components of Internal Control 10-32 (Components of internal control) Internal controls can be categorized using the following framework. 1. Control environment
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This note was uploaded on 04/07/2011 for the course ACCT 490 taught by Professor Richard during the Spring '11 term at DeVry Long Beach.

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Week 4 - Individual Assignments - Week 4 Individual...

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