USING THE INFORMATION BELOW COMPLETE ASSIGNMENT ONE IN THE AUDIT CASE IN PARTICULAR, COMPLETE PART

1. ENGAGEMENT LETTER (USING LAST YEAR'S ENGAGEMENT LETTER AND THE LETTER ON PAGE 204) WORD DOCUMENT ATTACHED, EDIT THE LETTER AND UPDATE IT FOR THE YEAR UNDER AUDIT.

5. PREPARE AN ANALYTICAL PROCEDURES MEMORANDUM CONSISTING OF

USING THE TRIAL BALANCE ATTACHED, A) REVIEW THE PERCENTAGE CHANGE DATA (ON THE TRIAL BALANCE ITSELF), B) THE COMMMON SIZE FINANCIAL STATEMENT FIGURES (ON WORKSHEET TAB) AND C) THE FINANCIAL RATIOS (COMPUTED ON A TAB) PREPARE THE ANALYTICAL PROCEDURES MEMORANDA WHICH PROVIDES 10 AN ANALYSIS OF AUDIT RISK USING A 20% CHANGE AS YOUR THRESHOLD AND IDENTIFY 2 PLAUSIBLE REASONS FOR THE CHANGE IN THE ACCOUNT ONE OF WHICH IS AN OPERAATIONAL REEASON, THE SECOND A POSSIBLE CLIENT ERRROR THAT MAY HAVE CAUSED THE DIFFERENCE.

ADDITIONALLY, DISCUSS OTHER ACCOUNTS THAT APPEAR QUESTIONABLE

ASSESS THE RISK OF FINANCIAL STATEMENT FAILURE. ASSESS THE FINANCIAL CONDITION OF PEACH BLOSSOM COLOGNE COMPANY AND THE CONSEQUENT AUDIT RISK RELATED TO CLIENT FINANCIAL FAILURE. WHERE POSSIBLE, RELATE THE RATIO ANALYSIS TO THE CHANGE ANALYSIS

OVERALL APPRAISAL OF AUDIT RISK PROVIDE AN ASSESSENT OF THE AUDIT RISK ASSOCITED WITH THIS ENGAGEMENT. BASE THIS ASSESSMENT ON THE ANALYTICAL PROCEDURES PERFORMED AND DETERMINE IF THE RISK IS LOW, MODERATE, OR HIGH RISK

6. PREPARE A MEMO WHICH ASSESS THE RISK OF MATERIAL MISSTATEMENT DUE TO FRAUD. FOCUS YOUR CONSIDERATION ON TWO TYPES OF MISSTATEMENTS, 1 THOSE ARISING FROM FRAUD, THOSE ARISING FROM MISAPPROPRIATION OF ASSETS

8. USING THE PLANNING MEMO FROM LAST YEAR AS A TEMPLATE FOR FOR THE CURRENT MEMO, PREPARE A AUDIT PLANNING MEMO, THE MEMO SHOULD INLCUDE THE FOLLOWING ITEMS.

Concerning the matters to consider when planning the audit, discuss the following items in your memorandum

1. the objective of your integrated audit (What is the ultimate goal?)

2. timing of the engagement

3. the company's pertinent aggregate financial data (e.g., Total Assets)

4. the history and background of the company

5. the principals (owners) and their qualifications

6. the integrity of client management

7. the state or condition of the companys internal control over financial reporting

8. capitalization (i.e., percentage of assets financed by debt and percentage financed by equity)

9. the type of company (public/nonpublic) and reporting requirements

10. the markets served

11. materiality level for planning the audit work (use 5% of pretax income)

12. likely audit adjustments, especially those affecting net income (see prior years working papers)

13. the type of opinions you expect to render on the financial statements and on internal control over financial reporting.

As to the procedures you will carry out, briefly discuss the following matters:

14. how you will familiarize yourself with the company and industry

15. what you will do regarding outsiders rendering services (e.g., attorneys)

16. schedule of the major audit work yet to be completedwhen work will be performed, e.g., inventory observationsee prior years working papers (Assume that interim work on internal control over financial reporting, as well as various accounts and business processes, has already been performed by Jasper Parsons and assistants under his supervision.)

17. the scope and timing of audit work (if any) to be performed by the clients staff (Hint: What work did the clients staff perform during the previous audit?)

18. the probable audit report date (see prior years working papers).