Please help me complete this case.

Apollo Audit Risk Mini$-$Case

In this mini$-$case you will evaluate information related to your client $-$ Apollo Shoes to determine audit risk.

Instructions:

Auditors are tasked with gathering a wide variety of information and then determining if it could impact the fair

presentation of the financial statements in accordance with generally accepted accounting principles. To do this

auditors use a framework of risk called the audit risk model. On the following tab you will be presented with a set of

facts about Apollo, you must decide if it is related to the audit, if so which part of the audit risk model they fall under

$($inherent risk or control risk$),$ how they affect the risk of material misstatement and what impact they have on

detection risk. $\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline & Factor & Relevant to Apollo's Financial Statement

Audit? & IR Factor & CR Factor & Why? Comments & Impact on RMM & Impact on DR $\backslash \backslash$

$\backslash$hline & Apollo operates in the competitive athletic and outdoor footwear industry. & Yes & Yes & & & & $\backslash \backslash$

$\backslash$hline & Apollo advanced $\backslash (\backslash$$ $1\mathrm{.}25\backslash )$ million to Larry Lancaster's secretary$.$ & Yes & Yes & NA & & $+($increase$)$ & $-($decrease$)\backslash \backslash$

$\backslash$hline $3$ & Apollo believes a major future market for their shoes is in galactic athletic footwear, but advances in space travel must be made for this market to emerge. & No & & & & & $\backslash \backslash$

$\backslash$hline & Apollo does not have adequate documentation supporting customer returns of product. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $5$ & Apollo has maintained a positive trend in net income over the past several years, and has a strategic emphasis on meeting profitability targets. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $6$ & Apollo has not allowed your firm to speak with the predecessor auditor about their withdrawal after last year's engagement. & Yes & & & & & $\backslash \backslash$

$\backslash$hline & Apollo has refinanced their short term line of credit into a long term note payable. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $8$ & Apollo incurred $\backslash (\backslash$$ $50,000\backslash )$ of charges to repair damages from a "Nor'easter" storm. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $9.$ & Apollo installed a new computer system mid$-$year. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $10$ & Apollo leases all their properties. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $11$ & Apollo requires a customer purchase order and credit approval in order to process a sale to a wholesale customer. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $12$ & Apollo suspended all R$\backslash$&D activities as a cost savings measure, and the lab will be converted into a gym for corporate executives. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $13$ & Apollo utilizes sales invoices and shipping documents are pre$-$numbered, but the sequence is not checked for missing invoices. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $14$ & Apollo's accounting and control manual has not been kept up to date. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $15$ & Apollo's CEO, Larry Lancaster, joined the company a few years ago. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $16$ & Apollo's credit manager reports to the VP of Marketing. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $17$ & Apollo's current products have built in features such as lights and loudspeakers that $7$ make the product appropriate for several niche markets such as athletes who like to compete at night, police officers on graveyard shifts and musical groups. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $18$ & Apollo's intemal audit director, Karina Ramirez, just joined the company this year. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $19$ & Apollo's IT staff is small and precludes optimal segregation of duties over the information system. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $20$ & Apollo's sales to employees, COD sales, disposals of property, cash sales and scrap sales are not subject to the same set of controls as credit sales. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $21$ & In the current year Apollo has seen a significant increase in net income despite stagnant sales. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $22$ & Larry Lancaster, Apollo's CEO is quite domineering and dictates accounting issues. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $23$ & Product litigation against Apollo has recently been settled, but Apollo admits no liability. & Yes & & & & & $\backslash \backslash$

$\backslash$hline $24$ & Sales are below budget. & Yes & & & & & $\backslash \backslash$

$\backslash$hline & The internal audit director, Karina Ramirez, reports directly to the audit committee. & Yes & & & & & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$