You have recently been engaged by a client to audit their financial statements. The client is a manufacturer of specially made to order high end watches. The audit is a requirement of the lending institution that has extended a substantial line of credit to this small privately held company. As you scan the prior year$$s balance sheet and income statement you notice that the company has a very material balance in their Accounts Receivable, Inventory and Equipment accounts. Also, with the added funding it appears that the company has managed to increase their gross revenue by over $100\%$ as compared to last year. Based upon your interview with the Controller you realize that not only are there only a few employees but most of them are related to the President$/$majority stockholder.

A$)$ Describe some of your concerns regarding the audit and how it affects your risk assessment.

B$)$ Choose the revenue cycle and create an audit program focusing on at least $3$ major assertions common to that area. Clearly identify what documents and tests you plan to use to determine if the financial statements have been presented fairly.