ACC 411Project Two Guidelines and Rubric Competency In this project, you will demonstrate your mastery of the following competency: Analyze potential risks and audit strategies for an organization Overview For this project, you will focus on analyzing potential risks for a client and developing an audit program to assist with testing. The importance of an audit of financial statements and internal/external controls is to add credibility to the reported financial position and performance of a company. The importance of understanding risk and how it affects a company is crucial to the outcome of an audit. The Securities and Exchange Commission requires that all publicly held entities file annual reports that have been audited signifying the importance of the audit process. Scenario W&S Partners is a U.S.-based accounting firm with offices located in most major cities. W&S Partners will be conducting the January 31, 2026, audit for Cloud 9 Inc., a publicly traded company. The firm has begun the planning phase of the external audit for Cloud9 and has assigned you the task of preparing for the audit. As part of the risk assessment phase of the audit, you will gain an understanding of Cloud9s internal control structure, financial accounts, business environment, materiality, and any inherent risks that may impact the company. You will also review external and other factors as well as interview data that could impact the audit. This understanding will assist you in developing an audit program and in designing the nature, extent, and timing of an audit program. Directions For this project, you will review the Cloud9 Case Study and use select data provided in the Supporting Materials section to perform an analysis of the company data. Areas covered will include internal controls of the company, IT controls, external and other factors that may impact the company, interview transcripts from company staff and other personnel, as well as Cloud9s financial data. Through your analysis, you will identify a minimum of two internal control deficiencies or anomalies (risks) for each of the following: accounts receivable, accounts payable, inventory, and information technology. Next, you will determine audit tests to be performed and internal control recommendations to remediate any risks. You will then research Cloud9s industry and related risks to determine what other controls over financial reporting you would recommend. Finally, you will add any information gathered through your analysis to your Cloud9 Audit Program Template found in the What to Submit area. Specifically, you must address the following rubric criteria: 1. Analyze financial accounting internal controls to identify risk. Include the following: A. Lines of business Cloud9 deals with B. Types of Cloud9 customers C. Types of Cloud9 suppliers D. Associated general ledger accounts, including materiality 2. Analyze information technology controls to identify risk. Include the following: A. IT general controls B. Company-level and application controls C. Cloud9s ability to adapt to changing technology 3. Analyze external and other factors to identify risk. Include the following: A. Laws and regulations that may affect Cloud9 B. Economy and its impact on Cloud9 C. Cloud9s industry 4. Analyze financial data gathered through data analytics to identify risk. Include the following: A. Validated notes payable balances B. Validated inventory balances C. Timing of revenues to ensure proper period D. Allowance for doubtful accounts a. Is it reasonable? b. How to confirm? E. Liquidity risk based on ratios F. Inventory moving based on ratios G. Customers paying on time based on ratios 5. Create an audit program to address identified risks. Include the following: A. Recommended audit tests for the audit team to perform