Reject Shop Events

EVENT 1 2nd November, 2010 Increase in interest count takes a toll on The Reject Shop (Greenblat, 2010) Discussion The monetary position of the company and therefore the assessment of going reach could be seriously affected by the increase in interest rates. Sales is expected to decline even encourage as consumers spending returns and savings level is at their highest level in 20 years. (Greenblat, 2010) Impact on the Audit The listener involve to collect evidence on the assessment of going cite (ASA 500 and ASA 570) and under(a)stand the entity and the industry in which it operates (ASA 315). The auditor in any case needs to assess any risks (ASA 330). One of the problems that an auditor could buttock during a deceleration in the market is dealing with managers who, under financial stress, may be inclined to manipulate financial numbers such as the sales figures. Many managers may see to it increased storm from shareholders, creditors or analysts to perform and deliver what has been promised. worry can play with the figures in the financial report to collapse a better and stable position of the company.

Under the pressure management takes more or less unethical steps to do some change in the financial report to portray an unserviceable face of the company and manage to hide the actual decrease in sale and fall in profitability margins of the company. An auditor needs to increase testing and pay attention oddly to: 1.Revenue and accounts receivable (journal entries, adjustments and balances) looking for fictitious revenues and recognition of afterlife revenue in the present financial year. 2.Purchase and accounts collectible (perform journal review and post balance sheet (PBSE) events. Eg. turnaround time of credit notes ASA 560. 3. Unusual transactions. 4. Prior-year accounting estimates (identify any changes) 5. Inventory, manipulation of step of inventory. Perform analytical review (ASA 520) on inventory. If sales figure rose drastically then inventory... If you want to get a full essay, order it on our website: Ordercustompaper.com

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