It is January 10, 2023, and you CPA, work as an auditor at Carleton LLP. One of the firm's long- term clients, Jeff Shaw, owns a group of companies, and recently added a new company to the group: Indie Films on Preston (IFP). Liz Zhang is the operational manager. Jeff operates many companies and relies on Liz to run the day-to-day operations of IFP with minimal oversight. Liz's annual bonus is based on a percentage of pre-tax net income per the audited financial statements. Liz's sister, Tiffany, has been doing the bookkeeping because she watched a cool video on how to do it and would like to help her sister. You are the auditor for IFP's first year audit, which ends on December 31st. The year-end date was selected to match Jeff's other companies. The audit is a specific requirement under the banks financing covenants. One of the covenants is to maintain a gross margin ratio of 0.80. 

Required The audit partner has asked you to do the following: - Complete a risk of material misstatement at the overall financial statement level; - Identify at least three accounts with a high risk of material misstatement and the relevant assertions

Answer rating: 100% (QA)

Risk of Material Misstatement at the Overall Financial Statement Level Introduction As the auditor for IFPs firstyear audit its crucial to assess the ... View the full answer