This is the third year of an audit of Green Lawns. comate company has carved out a
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• Another public offering of stock to raise $200 million in capital.
The stock offering will be equal to 30% of the existing stock outstanding.
• Sign an agreement with at least 50 more local distributors during the year.
• Improve warehousing and distribution to cut at least 20% off the distribution costs.
• Increase sales by 50% through more advertising, coupons, and better marketing to existing customers.
• Improve profit margins by using its purchase power to sign more attractive purchase agreements with vendors, but stay away from major brand vendors such as Scott's, Ortho products, and so on.
Required
a. What is the auditor's responsibility to evaluate the effectiveness of management's plan? What action does the auditor take if he or she does not believe management's plan will be effective?
b. Assume that the auditor modifies the opinion on the financial statements. What does this action say to the users of the financial statements about the confidence in management's ability? Is the auditor engaged to attest to the quality of management?
c. What is the required disclosure regarding management's plans?
d. For each element in management's plan, indicate the auditor's responsibility to assess the element. Indicate audit procedures that should be performed to assess each part of management's plans.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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Related Book For
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
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