Planning%20Analytical%20Procedures%20%28October%2026%202011%29

Planning%20Analytical%20Procedures%20%28October%2026%202011%29

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Planning Analytical Procedures & Triangle Manufactured Homes Tim Bauer ACCY 405 October 26, 2011
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Announcements Individual Writing Assignment Monday, October 31  (Due in drop box on Compass by 6pm) Midterm Exam #2 – Wednesday, November 2
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Today’s Objectives Final tips for the Individual Writing Assignment GT8: Triangle Manufactured Homes – Part 2 Financial Analysis, Audit Risk Assessments, Going Concern  The value of analytical procedures in audit planning Group Activity: Norton Wire Manufacturing Overview of Module II
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Final Tips for the IWA Here is just one way you could structure your guidance:  State the purpose of your guidance.  Provide a step-by-step process for the auditor:  1. 2. Consider alternatives 3. 4. Reach conclusion 5. In other words, you could adapt  the  general  guidance  provided  by  the  KPMG  PJF  to  the  fair  value measurement context.  Your goal:   Tell the auditor what to do!
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Final Tips for the IWA Some other things to consider: Are ice rink developments complete?   It shouldn’t matter. rationale.  Do you want the auditor to check that the real estate exists?  That the client has the rights over the future benefits of the  real estate? Do you want the auditor to come up with an independent  estimate and compare it to management’s estimate?   Tell  auditors what to look for.
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Final Tips for the IWA Some other things to consider: Do you want the auditor to hire an independent valuation  expert? How extensively should the auditor rely on the  valuation expert?  What documentation should the auditor obtain from client  management about their fair value measurement  procedures?  What questions should the auditor ask management? How  extensively should the auditor rely on evidence from  management inquiry? What kind of controls should the auditor be testing?   
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Final Tips for the IWA Triangulation: You’ll always have access to MBR (the client gives you their F/S  and other summary financial info). MII. EBS: they tend to be the inputs that would go into a FV  calculation (just rely on management’s inputs?). MII: processes, controls, and information sources.
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This note was uploaded on 11/17/2011 for the course ACCY 405 taught by Professor D during the Winter '11 term at University of Illinois at Urbana–Champaign.

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Planning%20Analytical%20Procedures%20%28October%2026%202011%29

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