Auditing Session – Research Project
Company Best Buy
Students – Below are the requirements for your auditing research paper. Please submit on Saturday, December 1. Please prepare a 10 minute presentation on your findings that will be presented to the class on December 1. The research paper must be typed (between 4-6 pages). You can use an SEC registrant of your choice.
Prepare an Audit Strategy Memorandum for your public entity.The auditor should establish an overall audit strategy that sets the scope, timing and direction of the audit and guides the development of the audit plan. In establishing the overall audit strategy, the auditor should develop and document an audit plan that includes a description of (a) the planned nature, timing and extent of the risk assessment proceudres, (b) the planned nature, timing and extent of tests of controls and substantive procedures, and (c) other planned audit procedures that must be performed so that the engagement complies with auditing standards. The memorandum should address the following:
Company Overview – Please provide an overview of best buy, include commentary on their operations, its services and products, industry, key competitors, strategy, business objectives, etc.
Risk Assessment – Describe the key risks impacting your company. Utilize the risk section of the Form 10-K in addition to information included in the Management Discussion and Analysis section and footnotes to the financial statements (i.e. liquidity risk, changes to accounting policies or methods, new markets or new product lines, related party transactions, etc.). Discuss any unique or non-recurring transactions that will impact your risk assessment (i.e. an acquisition, IT systems implementation, etc.). Include commentary on circumstances that may exert undue influence on management and potential fraud risk factors (refer to Chapter 4 lecture on fraud risks).
Discuss the types of opinions used for your company – include commentary on the financial statement opinion and the opinion on internal controls over financial reporting. Did the opinions include any qualifications?
Discuss the expertise of the engagement team that is needed based on the company overview and risk assessment. Include commentary on any specialists that will be needed in addition to the audit team. Comment on the locations/regions that will need to be visited by the engagement team.
What are the material accounts and key accounting policies that will be the focus of the engagement team. Include a description of the audit procedures for material accounts.
What additional information will you request in your planning discussion with client management?