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Analysis and Audit Plan Spring 2013

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Question;Analysis and Audit;Plan;Spring 2013;(Mohawk Industries);The objectives of this project are;as follows;1. To acquaint students with the annual;report and Form 10-K of a publicly held company audited by a CPA firm.;2. To provide data for the practical;application of different steps in the audit process.;3. To allow students to experience writing;as is done in an actual business/audit setting.;Logistics;1. The final paper should be professionally;presented in a report binder.;2. Double space the paper;3. Use Times Roman 12 font;4. There;is not a required length. However, most papers generally run about 8 pages in;length. The paper should not exceed 10;pages.;Detailed Instructions;1.;Obtain;a copy of a recent annual report of your assigned publicly held company (Mohawk;Industries) with;stock actively traded on the New York, NASDAQ or other over-the-counter;exchanges. Each student will have a company;from the list provided by the instructor.;2.;Answer;the following questions using appropriate business prose, i.e., answer the;questions in the body of the report. Do;not simply list the question and the corresponding answer.;a.;What is the company?s industry?;b.;What are its primary products?;c.;What raw materials does the company use?;d.;How large is the company;?;Sales;?;Assets;?;Employees;e.;Where is the company located?;f.;What other people/companies are closely associated with this company?;g.;Look at the annual report;?;What;image does it intend to convey?;?;What;are the segments and functional contents of the report?;3. Obtain a copy of the Company?s 10-K;report for the same date as the annual report.;Answer the following;questions;a.;How does the 10-K differ from the annual report?;b.;Supplement the answers to the questions under 2 as appropriate.;4. Obtain outside information about the;company and its industry. Answer the;following questions;a.;What are the key economic factors about the industry?;b. Where is the company in its life cycle?;c.;What are the five or six most important factors for success in this;business?;d.;How does this company stand with respect to these factors?;e.;Describe four or five key business risks related to the client?s;business and industry.;f.;What notable accounting considerations are there for companies in this;industry?;g.;What legal or regulatory matters are of concern?;h.;What social matters are of concern?;5. Analyze the company?s financial strength;a.;Assess the financial strength of the company?;b.;How is the financial strength likely to change in the next year or so?;c.;What are its sources of capital and what is the value of the company?s;capital?;d.;How have the capital markets responded to the company in the last year?;e.;What is the quality of earnings?;f.;How does the company compare with others in the industry?;6. Prepare a broad audit plan;a.;What material types of transactions and transaction cycles are involved?;b.;What are the high-risk areas?;c.;What are the low-risk areas?;d.;If management faced tremendous pressure regarding the entity?s financial;performance, what opportunities might;exist for them to engage in fraudulent financial reporting?;e.;To what extent do you believe it will be appropriate to reduce assessed;control risk?;f.;How will audit effort be allocated among geographical areas?;g.;What form of auditors? report do you expect will be issued, what does it;mean?

 

Paper#52682 | Written in 18-Jul-2015

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