TERM PROJECT 4 Analysis and Audit Plan The objectives of this project are as follows: 1. Toacquaint 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 certain steps in the audit process 3. To allow students to experience working on a team. as is done in actual auditing Detailed Instructions 1. Form a group of four persons. Discuss how you ~ill organize (assign responsibilities, to complete this project in a suitable format 2. Obtain a copy of a recent annual report of a publicly held company with stock actively traded on the New York, American or over-the-counter exchange. Answer the following questions: What is the company’s industry? What are its primary products? What raw materials does the company use? How large is the company’ = sales = assets = employees e. Where is the comnany located? What other people/companies are closely associated with this company? Look at the annual report ‘=| What image does it intend to convey? = What are the segments and functional contents of the report? aocm em 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. vi~~ Adie tind Gy RAL INSURE SOMMER Obtain outside information about the company and its industry. Answer the following questions. What are the key econom:. factors about the industry? a 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? What notable accounting considerations are there for companies in this industry? What legal or regulatory matters are of concern? g. What social matters are of concen? Analyze the company's financial strength: Is this a financially strong compe +y? b Which way is it moving? What are its sources of capital ari what is the value of the company’s capital? d. How has the capital market place responded to the company? e. What is the quality of earnings? f How does the company compare with the rest of its industry? Prepare a broad audit plan What material types of transactions and transaction cycles are involved? a b. What are the'high-risk areas? c. What are the low-risk areas? d. To what extent do you believe it will be appropriate to reduce assessed control risk? e. How will audit effort be allocated among x. sgraphical areas? £ What form of auditors’ report do you expect will be issued; what does it mean? Indicate as an appendix to the report how the project team was organized and how it functioned on the project. The project will be graded-as follows ITEM _| CONTENT Mii