Well, things are coming to a close. The last thing that we have to do is to look at revenues (R-1) and expenses (X-1).
We can tie down most of the numbers from the work that we have done previously. For example, we can feel pretty good about the revenue that was confirmed in the accounts receivable testing (C-series). Use analytic procedures on returns and warranty expense to make sure that they are reasonable. They should be comparable to last yearÂ’s numbers compared to sales.
For expenses that we have not examined already:
1. Use analytic procedures for those that should be comparable to those in the previous year. For example, for the payroll taxes, compare last yearÂ’s numbers as a percentage (ratio) of payroll expense and compare to this yearÂ’s ratio. Cost of Goods Sold should remain relatively constant as a percentage of sales, unless suppliersÂ’ costs have gone up or sales prices have changed. The same should be true for freight and warranty expenses.
2. For those expenses subject to management discretion, double-check the board of directorsÂ’ minutes for explanations of fluctuations. For example, I know that the company severely cut back on Research and Development during the current year.
3. Other information:
a. Legal expense was confirmed directly in the attorneyÂ’s letter.
b. Have they recorded our fee for the 2007 audit?
c. With ApolloÂ’s extensive use of e-mail now, I think postage and phone expenses are down from last year.
d. Has interest expense been accrued?
Recently Asked Questions
- Please refer to the attachment to answer this question. This question was created from CPC - Med Term and A P Review.docx.
- please explain Consider the following training dataset
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