Project_Bancroft - 6C-1 Section Purpose Objectives of the...

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6C-1 Section Purpose Content Objectives of the Engagement Business and Industry Conditions Planning Meetings To discuss planning meetings. Ownership and Mgmt Significant Risks To describe the significant risks. Planning Materiality To discuss materiality amounts $300K will be used as reasonable materiality amount for planning purposes. Scheduling and Staffing Plan To describe the services that are to be rendered to the client. The objectives are (1) audit of KCN's financial statements for the year ended 12/31/X5, and (2) issuance of a letter on compliance with covenants of the client's letter of credit agreement. To describe the conditions of KCN's business and industry. KCN sells and installs computers and networking hardware and software to business customer and provides other IT consulting services. The industry is very competitive. It is also sensitive to economic conditions. They have been able to effectively compete because their customers are willing to pay for the high level of expertise and service that the company provides. There has been one meeting with the client and one with the engagement team. To describe company ownership and management. KCN is owned by 5 stockholders, two of which take an active part in mgmt. Terry and Mark Keystone are owners and on the board of directors, John Keystone, Keith Young and Rita Young are the other owners. Objectives, Strategies and Business Risks To discuss KCN's objectives and strategies, and the risks that come with them. Objective: Increase revenue and net income by 6% and 8%, respectively. Strategy: Increased advertising, granting credit/making sales to customers with higher credit risk, new software development. Risks: Economy may continue to falter, competitors may engage in predatory pricing, advertising costs may not produce sales, higher risk customers may not pay their bills,
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This note was uploaded on 01/10/2012 for the course ACC 435A taught by Professor Hathcock during the Winter '11 term at National.

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Project_Bancroft - 6C-1 Section Purpose Objectives of the...

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