Fishers Boats - 3. What inquires or follow-up audit...

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Fishers’ Boats One of your audit clients, Fishers’ Boats, manufactures fishing boats and sells them all over the country. Boats are sold to dealers who finance their purchases with their banks. The banks usually pay Fishers within two weeks of shipment. Fishers’ profits have been increasing over the past several years. You have obtained the following information related to your 2010 audit ($ in millions). 2010* * 2009 * 2008 * 2007 * 2006 * Major Competitor (2010) Accounts Receivable 6.8 3.3 2.3 1.8 1.7 4.2 Inventory 16.0 10.0 7.2 5.5 5.1 13.9 Accounts Payable 3.1 2.6 1.9 1.5 1.4 3.2 Sales 84.7 77.9 56.8 43.6 39.8 110.3 Gross Profit % 19% 17% 18% 17% 18% 21% Number of Days Sales in Receivables 29 16 15 16 16 14 Number of Days Sales in Ending Inventory 69 47 46 46 47 46 * Audited ** Unaudited Required: 1. From the data shown, identify potential risk areas and explain why they represent potential risks. 2. Suggest possible explanations for any unexpected results
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Unformatted text preview: 3. What inquires or follow-up audit procedures might be performed to determine the accuracy of the clients data? 4. How might the CFO use accounts receivable and inventory to conceal embezzlement of cash? COMPLETE AND HAND IN THE ATTACHED SHEET 1 GROUP NAME: _________________________________________________________ GROUP MEMBERS PRESENT: ____________________________________________ _______________________________________________________________________ 1. Potential Risk Areas Explanation why Risk 2. Possible Explanations for fluctuations: 2 3. Inquiries and Follow-up Procedures: 4. How might CFO use AR and inventory to conceal embezzlement: % Chang 3 e 2010 200 9 Accounts Receivable 106% 43% Inventory 60% 39% Sales 9% 37% 4...
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This note was uploaded on 09/29/2011 for the course ADMS 4551 taught by Professor Iacobelli during the Spring '11 term at York University.

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Fishers Boats - 3. What inquires or follow-up audit...

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