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During the completion of an audit, a sample is selected and then evaluated against some criteria to determine whether the auditor believes the financial statements to be correct and in accordance with Generally Accepted Accounting Principles (GAAP). One of the three important steps in the audit process, after the client has been accepted, is to plan the audit. In this stage, analytical procedures are very important to identify high risk areas which should be tested more intensively. These procedures are used to evaluate whether or not the five main management assertions are being followed. The five assertions are existence or occurrence, completeness, valuation or allocation, rights and obligations, and presentation and disclosure.
With the financial data which has been provided by the inexperienced staff assistant the most obvious analytical procedure to start with is to compare the 2005 financial date with the 2004 financial data. By analyzing the two years against each......
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Title: Laramie Wire Manufacturing
Approximate Word Count: 308
Approximate Pages: 2 (250 words per double-spaced page)
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