Auditing Essay Example | Topics and Well Written Essays - 500 words - 1

Auditing - Essay Example An auditor who works for a mid size firm takes on the assignment of auditing Telechubbies for the first time based on information that is provided to the auditor by Rachel Jones, the financial controller of Telechubbies. The basic information given to the auditor is that there is a requirement to maintain a 2:1 debt to equity ratio based on a loan contract. The provision for inventory obsolesces is 10% which is was cut 100 per cent from the previous year’s levels and the company wants another 100 per cent reduction this year to bring it down to 5%. A third piece of data given is that the long term receivables in the books belong to an R&D company owned by one of the directors. The auditor would start this audit by inspecting the balance sheet, income statement, annual report, code of ethics, and physical warehouse of Telechubbies. The balance sheet requires special attention. This financial statements has the data to calculate the debt to equity ratio. The auditor needs to inspect that the company is complying with the 2:1 requirement. After verifying the metric the auditor should go back a few years and compare the current debt to equity ratio level to the last three years results to find any tendency in the metric that might place the contract at risk in the near future. The company recently changed its inventory obsolescence provision to 10%. The auditor has to immediately verify if this changed was notified to the shareholders in the financial statements in the form of a note to the financial statements. This change represent a new discrepancy in the way the accounting methods thus it must be notified for purposes of following the accounting principle of consistency. The desired to cut the provision down to 5% requires certain numerical and physical auditing procedures. The long term receivable information is a worrisome sign since lending money to a company that is owned by a company director

IP1 ECON Essay Example | Topics and Well Written Essays - 750 words

IP1 ECON - Essay Example The price could fall as the A-phone is trying to clear the stock of the current models while developing new models to compete with the promegranate. The curve is likely to move to the left due to a fall in demand. If there is an increase of the price of A-phone due to a flaw found in the promegranate, demand is likely to fall if there are other competitors, but if there is little or no competition, the demand is going to rise (Bernanke and Abel, 2000). The movement is going to move according to the change in demand. If there is a new type of walkie-talkie that has unlimited range, and is basically free, demand for the A-phone is likely to fall. The rate in the fall in demand will depend on how many unique features the A-phone has. There is large number of people interested in the unique features such as cameras, and mp3 players. The price must fall in order to attract buyers even when the walkie-talkie is free, therefore, the curve will shift to the left due to the fall in demand. If it is discovered that there are health concerns when using cell phones, there is will be a drastic fall in the demand and price, since few people w ill be willing to use the phone. In this case, the curve is likely to move to the left due to the fall in demand. If there is a baby boom, there will be an increase in customers and therefore demand is likely to increase, and the price is also going to increase. In this case, the curve is going to shift to the right. If the price of the A-Phone and the Pomegranate both go up, demand is likely to remain the same, however, if the other brands in the market do not raise their prices, the demand may fall. The graph is likely to remain the same if the demand remains the same. If the market price of cell phones goes up, the demand will go down. The supply will outweigh the demand. Therefore there will be excessive supply in the market. If it becomes more expensive to