There is a potential related party transaction, which could affect the valuation of the transaction and may require disclosure as a related party transaction. The primary concern is the possibility of obsolete inventory, which affects the valuation of inventory at the lower of cost or market.
Item 4 in the planning phase indicates plans for additional debt financing. Item 1 in the planning issues raises a concern about the viability of the Solar-Electro division, but not necessarily the entire company. Identif specific considerations from part I and II of the cas that affect your assessments of engagement risk and acceptable audit risk.
The company is privately held, but there is a large amount of debt, therefore the financial statements will be used fairly extensively.
Pinnacle Manufacturing Part II a. Inherent risks are addressed by examining each of the 11 items in the planning phase. No major issue exists that would cause the auditor to question management integrity, but the auditor should have done extensive client acceptance procedures before accepting the client.
The solar power engine business revolves around constantly changing technology, thus making it inherently more risky than other businesses, with a better chance of subsequent bankruptcy. Also, management is considering selling the Machine-Tech division, which has the potential to result in extensive use of the statements by the buyers.
The conclusion in Part I of the case was that the likelihood of financial failure is low, even considering the issue with Solar-Electro. The current ratio has fallen below 2. Manufacturing equipment, footnote disclosures 4. Some might prefer an even lower acceptable risk because it is a first year audit.
Inventory, cost of good sold 3. Acceptable audit risk is likely to be medium to low because of the factors listed previously, especially the planned increase in financing and the potential violation of the debt covenant agreement.
This could result in the loan being called unless a waiver of the loan covenant is granted. No effect on inherent risk 5.
Likelihood of financial difficulties: It is possible that Item 6 in the planning phase, turnover of internal audit personnel, could be intentional and increases the risk of fraudulent financial reporting.Essay on Decisions in Paradise Business Scenario part III Words | 5 Pages Decisions in Paradise Business Scenario part III One my say the core of any organization is the staff of team members.
Decisions in Paradise: Part 1 The Island of Keva is in the South Pacific and is facing many unfortunate circumstances that have involved natural disasters.
This small island is in the dire need for some help and assistance from my organization for the children of. Apr 16, · Anti Essays offers essay examples to help students with their essay writing.
Our collection includes thousands of sample research papers so you can find almost any essay you want. Decisions In Paradise Part 1 Essays and Research Papers. Decisions in Paradise Part III MGT August 15, Jessica Lowery Kavas.
Decisions in Paradise Part III Shanelle Allen February 6, MGT/ Gracie Aguilera Decisions in Paradise Part III Prior to presenting the decision to build a propery in Kava, Nik performed a Risk Analysis on behalf of Hilton Worldwide. Decisions in Paradise 2 Decisions in Paradise: Kava - part 3 The past two segments on Kava have discussed many different ideas and situations which the people of Kava have to face as well as Nik, Alex and Chris.
In the first part of this Kava journey Nik was new to the island of Kava and to this new job. Nik had to make a chose, whether to stay and.
Essay title: Pinnacle Manufacturing Part II a. Identif specific considerations from part I and II of the cas that affect your assessments of engagement risk and acceptable audit risk.
use each of the three factors in the text to categorize your conclusions/5(1).Download