Q1: Perform analytical procedures to help you identify relatively risky areas that indicate the need for further attention during the audit, if any.

Q2: Focus specifically on each of the following balance-related management assertions for the inventory account: existence, completeness, valuation, and rights and obligations. Link any risks you have identified for this account in question 1 to the related management assertion. Briefly explain identified risks for the inventory account that require further attention, if any

compute the following:

• • Average Days Sales in Receivables.
  • Percentage Change in Cost of Goods Sold -
  • Percentage Change in Inventories -
  • Inventory as a Percent of Sales.
  • Percentage Change in Accounts Payable

Laramie is a mediumsized company that buys copper rod and plastic materials to manufacture insulated copper wiring. Laramie operates out of a single building complex totaling EUUIUU square feet, which includes ofce space {3%}, production area {ETDIu}, shipping and receiying [15%). and nished goods and raw materials inyentory warehousing (25%). Laramie supplies insulated copper wiring in the northeastern part of the United States. The company has a good reputation for quality products and has had a good working relationship with its outside accountants oyer the past it) years. You have been assigned responsibility for auditing Laramie's inyentories. You are in the planning stages of the audit, and you are preparing to conduct some analytical procedures to identifyr areas that may represent heightened risk and that thus may require further attention. Your staff assistant assembled information relating to inyentories and ether items, including a brief description of Laramie's production and inyentory areas. Because your assistant is new, be is not very good at weeding out irreleyant information, so you may not need to use eyery piece of information he has proyided. The information is listed below. Sales Cost of Sales Finished Goods Inventory (Approx. 250 million 0.} Copper Pod Inventory (Approx. 5.5 million lbs} Plastics Inventory {Approx 1 million lbs] Amounts Payable {for lrw. purchases} Days Pu rehases in MP Days Sales in Receivables Market Price of Insulated Wire l per foot} Market Prire of Copper Rod {per lb.) Market Price of Plastics {per 10.} 2010 $ 0.450.000 $ 0,242,500 $ 1,054,500 $ 2,025,000 1*; 224,5 00 $ 450.000 43.0 days 50.3 days 3 0.000 3 0.400 $ 0.120 2017 $ 0.150.000 s e.oeo,ooo s 1,1?s,soo 5 1,050,000 $ 102,000 $ 425.000 44.2 days 40.4 days 5 0.00? $ 0.400 3 0.190