AUDITch4problem[1] - total percentage differences would...

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CHAPTER 4; PROBLEM 47 TO: Mr. Kermit Griffin, Audit Mananger FROM: Mr. DATE: September 29, 2011 SUBJECT: Majestic Hotel’s industry average and operations After conducting an analytical procedure, it has come to our attention that a few areas, including cost of beverages sold, beverage gross profit, and profit per food and beverage sales dollar, could possibly represent potential misstatement in the audit. While analyzing the percentage differences between Majestic Hotel and the hotel industry average, we were expecting that the differences would be of values less than 10% and that the
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Unformatted text preview: total percentage differences would total to 100%. It appears that the cost of beverages sold at Majestic Hotel is 14.1% above the industry percentage. The beverages gross profit is 14.1% below the industry average. The profit per food and beverage sales dollar is 10.6% below the industry average. The total of the significant percentage difference came to a value of 111.2%. In conclusion, we believe that it is possible that some misstatements could have occurred. If so, the cause of them would be primarily in the cost of beverages sold and the beverages gross profit. MDG...
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