Understanding the Client and Performing Analytical ProceduresOverviewIn this assignment, you will...

Question

Understanding the Client and Performing Analytical Procedures

Overview

In this assignment, you will prepare a two to three page report that addresses the requirements specified in the case for Parts 1 and 2. Include your calculations as part of your analysis and fully explain the results. Also, include a minimum of two current references to scholarly and/or authoritative sources.

Instructions

Your report must address all of the following:

Address the overall understanding of the retail and wholesale industries and identified areas that impact financial reporting.

Analyze Cloud 9’s financial position and its business risks. Include ratios supporting the business analysis.

Identify areas requiring special emphasis during the audit and potential problem areas.

Address materiality in your response.

Use at least two current, quality academic or authoritative sources in this assignment.Note:Wikipedia and similar websites do not qualify as quality scholarly and/or authoritative sources. Use theStrayer University Libraryto conduct your research.

Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted. Printed by: [email protected]. Printing is for personal, private use only. No part of this book may be reproduced or transmitted without publisher's prior permission. Violators will be prosecuted.

chapter-2-reading-from-the-book-34rzmife-bfmhfgk2.pdf

Khushboo · Accepted Answer

Analysis of overall understanding of retail and wholesale industries:
The wholesale and retail industry play an important role in financial reporting and there are various factors which impact the financial reporting in the industry. In wholesale and retail industry, there are mainly three ratios which are used to analyze the financial performance i.e. return on assets, return on sales and return on net worth. In year 2008, the ROA of industry was 2.2%, return on sales was 1.3% and return on net worth was 4.39% (Steve McDonnell). The quick and current ratio for the industry was 0.62 and 1.36 respectively. Further the inventory turnover ratio was 10.49 times. Thus, the investment value, net income, sales, net worth, net working capital and inventory levels are the important factors which impact the financial reporting in significant manner.
Analysis of cloud 9’s financial position and significant risk:
The risk level of Cloud 9 shows that there is medium inherent risks level at company level. Further if the risk has potential to be material and present then it can be resulted into significant material misstatement in financial statements of Cloud 9 (Sel Espinosa, 2012). The financial position of Cloud 9 is good as it has earned 16.37% as ROE for its shareholders in year 2015.

Understanding the Client and Performing Analytical Procedures Overview In this assignment, you will prepare a two to three page report that addresses the requirements specified in the case for Parts 1...