Unformatted text preview: 456 The major risk with this company, according to the table, are the earnings per share. It has fluctuated a lot over the past several years, and currently is declining. With the uncertainty of the stock, it is still considered a risk. One of the biggest and most obvious things that changed during the year, as compare to the previous year, are the costs and inventory rollover categories. In previous years, the dales sale in inventory has been higher, and that is something that needs to come down and did for the current year. Also the cost of goods sold decreased this year, which I believe is something to work on. 462 The key risks associated with this audit would be the interest rates and what pattern they had held over previous years versus current year. There have been several economic impacts that could seriously affect this company, and how much it is writing off as bad debt due to the bad economic situations. I think independent appraisals, although not strong evidence, are always good to have. By doing this, it gives the auditor an independent verification of what is going on to see what steps need to be taken next. 542 Monitoring is an important part of internal controls. By identifying control failures, management can determine the appropriate action as well as determine the root cause of the problem to ensure that it is corrected. Monitoring can be done through ongoing activities or separate evaluations, depending on the business and circumstance. ...
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- Spring '10
- Interest Rates, current year., inventory rollover categories., bad economic situations.