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Description Understanding the Client and Performing Analytical Procedures Address the overall understanding of the retail and wholesale industries and identified areas that impact financial reporting. Analyze Cloud 9’s financial position and its business risks. Include ratios supporting the business analysis. Identify areas requiring special emphasis during the audit and potential problem areas. Address materiality in your response.Audit Risk and Sampling Explain the effects on the account of the opening of the first retail store. Describe how the business change will affect audit risk components. Determine expected changes to inventory transactions and balances and specify which will be most affected by the business structure change. Describe the population(s) and recommend a sampling approach for substantive inventory testing.The assignment will be checked for plagiarism! 5 attachmentsSlide 1 of 5attachment_1attachment_1attachment_2attachment_2attachment_3attachment_3attachment_4attachment_4attachment_5attachment_5.slider-slide > img { width: 100%; display: block; } .slider-slide > img:focus { margin: auto; } Unformatted Attachment Preview Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Understanding the Client and Performing Analytical Procedures Overview In this assignment, you will prepare a 2 - 3 page report that addresses the requirements specified in the case for Parts 1 and 2. Include your calculations as part of your analysis and fully explain the results. Also, include a minimum of two current references to scholarly and/or authoritative sources. Instructions Your report must address all of the following: 1. Address the overall understanding of the retail and wholesale industries and identified areas that impact financial reporting. 2. Analyze Cloud 9’s financial position and its business risks. Include ratios supporting the business analysis. 3. Identify areas requiring special emphasis during the audit and potential problem areas. 4. Address materiality in your response. Cloud 9 - Continuing Case Part 1: Gain an Understanding of the Client W&S Partners began the planning phase of the Cloud 9 audit. As part of the risk assessment phase for the new audit, the audit team needs to gain an understanding of Cloud 9's structure and its business environment, determine materiality, and assess inherent risk. This will assist the team in developing an audit strategy and designing the nature, extent, and timing of audit procedures. Required Answer the following questions based on the additional information about Cloud 9 presented in the appendix to this text. Your task is to research the retail and wholesale footwear industries and report back to the audit team. Your report will form part of the overall understanding of Cloud 9's structure and its environment. You should concentrate your research on providing findings from those areas that have a financial reporting impact and are considered probable given Cloud 9's operations. Use the factors listed in Illustrations 4.2 and 4.3 as a guide for your research. Part 2: Analytical Procedures Required Answer the following questions based on the information presented for Cloud 9 in the appendix to this text and the current and earlier chapters. You should also consider your answers to the case study questions in earlier chapters. a. Using analytical procedures and the information provided in the appendix, perform an analysis of Cloud 9's financial position and its business risks. Discuss the ratios indicating a significant or an unexpected fluctuation. b. Which specific areas do you believe should receive special emphasis during your audit? Consider your discussion of the analytical procedures results as well as your preliminary estimate of materiality. Prepare a memorandum to Suzie Pickering outlining potential problem areas (that is, where possible material misstatements in the financial statements exist) and any other special concerns. Reference Raymond N. Johnson. 2019. Auditing: A Practical Approach with Data Analytics. Wiley. Audit Risk and Sampling Overview In this assignment, you will prepare a 2–3 page report that addresses the requirements specified in the case. Fully address each requirement and include at least two current references to scholarly and/or authoritative sources. Instructions Specifically you will be required to: 1. Explain the effects on the account of the opening of the first retail store. 2. Describe how the business change will affect audit risk components. 3. Determine expected changes to inventory transactions and balances and specify which will be most affected by the business structure change. 4. Describe the population(s) and recommend a sampling approach for substantive inventory testing. Cloud 9 - Continuing Case Answer the following questions based on the information for Cloud 9 presented in the appendix to this text. Required a. Consider and explain the effects of the opening of Cloud 9's first retail store on its accounts. b. Describe how this business change would affect the components of audit risk. c. What changes would you expect to see in inventory transactions and balances as Cloud 9 changes from a wholesale-only business to a retail and wholesale business? Be specific in your answer. d. Which inventory balance and transaction assertions would be most affected? Explain. e. Describe the population(s) and suggest a sampling approach for substantive testing for inventory. Reference Raymond N. Johnson. 2019. Auditing: A Practical Approach with Data Analytics. Wiley. Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Printed by: isauralperry@gmail.com. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. / Purchase answer to see full attachment Tags: financial position Analytical Procedures audit risk ratios supporting inventory transactions User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.