ASSIGNMENT: AUDIT PLANNING AND CONTROL

TEXT: Auditing and Assurance Services: an Integrated Approach - ARENS | ELDER | BEASLEY | HOGAN

Albert, CEO of XYZ, Inc., desires to expand the company's sales through exports to three (3) foreignsubsidiaries. Albert knows that the target subsidiaries are located in countries that require transactions to be denominated in the local currencies. Albert has researched foreign currency risk and knows that there is accounting exposure in accounting statements, operating exposure in future cash flows, and transaction exposure in outstanding obligations.

Albert does not understand how these risks apply to XYZ, Inc. under his proposal or if there are any mitigating risk strategies available. Albert requests you, the head of the Risk Management division, to prepare a report that he can present to the Board of Directors on the potential foreign currency risk if XYZ, Inc. expands sales into these markets. XYZ, Inc.'s reporting currency is the U.S. dollar and the subsidiaries would purchasethe merchandise as inventory items.

Note:You may create and / or make all necessary assumptions needed for the completion of thisassignment.

Write a four to six page paper in which you:

1. Outline the critical steps inherent in planning an audit and designing an effective audit program. Based upon the type of company selected, provide specific details of the actions that the company should undertake during planning and designing the audit program.

2. Examine at least two performance ratios that you would use in order to determine which analytical tests to perform. Identify the accounts that you would test, and select at least three analytical procedures that you would use in your audit.

3. Analyze the balance sheet and income statement of the company that you have selected, and outline your method for evidence collection which should include, but not be limited to, the type of evidence to collect and the manner in which you would determine the sufficiency of the evidence.

4. Discuss the audit risk model, and ascertain which sampling or non-sampling techniques you would use in order to establish your preliminary judgment about materiality. Justify your response.

5. Assuming that the end result is an unqualified audit report, outline the primary responsibilities of the audit firm after it issues the report in question.

6. Use at least four quality academic resources in this assignment.

Note:Wikipedia and other Websites do NOT qualify as academic resources.

Your assignment must follow these formatting requirements:

Be typed, double spaced, using Times New Roman font (size 12), with 1" margins on allsides; Citations and references must follow APA or school specific format.

Include a cover page, the cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

• Plan and design a generalized audit program.

• Determine the nature and extent of evidence accumulated to conduct an audit after considering the unique circumstances of an engagement.

• Evaluate a company's various risk factors and the related impact to the audit process.

• Evaluate effective internal controls that minimize audit risk and potentially reduce the risk of fraud.

• Use technology and information resources to research issues in auditing.

• Write clearly and concisely about auditing using proper writing mechanics.