(Q) Audit the revenue cycle of a company’s operations

SCENARIOYou work as an audit senior for a national CPA firm and have been assigned to audit the revenue cycle of the company’s 2020 calendar year-end annual financial statements. You work out of the Las Vegas, Nevada, branch office and are very familiar with the manufacturing and the gaming industry. The audit client, KMHS Manufacturing Company Inc., has been an audit client of your firm for the last three years, but this will be the first year you have worked on the engagement. During the brainstorming session held prior to fieldwork, the audit partner noted that that the company was having financial difficulties due to reduced revenue as a result of a global pandemic. An emphasis was added to the audit for the team to carefully consider management override.KMHS began operations on January 1, 2005, in Las Vegas. The company is a nonpublicly traded, closely held S corporation with three shareholders: the CEO, who owns 40% of KMHS; the COO and general manager, who owns 35%; and the CFO, who owns 25%. The shareholders chose Las Vegas for the central location to casinos on the West Coast, low risk for natural disasters, and favorable gaming outlook by the banking industry. The three shareholders have 75 years’ experience between them in the gaming industry. The shareholders invested $1.4 million into the company when it began operations (see the attached “Appendix C: Financial Statements”). There are no related party transactions.The company sales are classified under two groups: commercial customers and individual consumers. The company sells three products: casino chips (chips), dice, and playing cards (cards). Sales of chips, dice, and cards to commercial operations are conducted through KMHS’s Sales Department. The company’s final revenue stream is through slot machines (see the attached “Appendix A: Products, Sales, and Revenue” and “Appendix B: Customers, Warranties, Economic Conditions, and Accounts Receivable”).During 2005, KMHS negotiated a $1 million bank loan to cover development of casino chips. In addition, it negotiated a $1 million line of credit. During 2012, the company negotiated an additional bank loan to cover the production of slot machines. In 2019, the company then negotiated a consolidated loan to finance production costs for dice technology. The negotiated loan required KMHS shareholders to add additional capital to lower the debt-to-equity ratio to no greater than 0.8%. The bank loans are collateralized by all the assets of the company and are guaranteed individually by the shareholders. Average interest rates for 2020, 2019, and 2018 were 6.0%, 6.0%, and 4.5%, respectively.
REQUIREMENTSYour submission must be your original work. No more than a combined total of 30% of the submission and no more than a 10% match to any one individual source can be directly quoted or closely paraphrased from sources, even if cited correctly. The similarity report that is provided when you submit your task can be used as a guide.You must use the rubric to direct the creation of your submission because it provides detailed criteria that will be used to evaluate your work. Each requirement below may be evaluated by more than one rubric aspect. The rubric aspect titles may contain hyperlinks to relevant portions of the course.Tasks may not be submitted as cloud links, such as links to Google Docs, Google Slides, OneDrive, etc., unless specified in the task requirements. All other submissions must be file types that are uploaded and submitted as attachments (e.g., .docx, .pdf, .ppt).Note: Format your submission document according to the requirement and rubric aspects, including the letter and number for each response (A, B, C3, for example).A. Describe the purpose of the audit risk model and explain the relationship between each component.Use the scenario and the attached Appendixes A–F to complete the following:B. Assess the engagement risk (auditor business risk) at high or low, based off the attached “Appendix D: Client Business Risks.” Justify your response using three or more aspects from Appendix D.C. Address the following risks related to the revenue cycle:
Assess inherent risk for the revenue cycle at high or low. Justify your response using three or more aspects from the attached “Appendix E: Inherent Risks—Revenue and Accounts Receivable.”
Assess control risk for the revenue cycle at high or low. Justify your response using three or more aspects from the attached “Appendix F: Control Risks and Internal Controls Walkthrough.”
Determine whether the risk of material misstatement is high, moderate, or low based on your response in parts C1 and C2. Justify your response.
Set and interpret the desired level of audit risk at 1% or 5%, based off your response in part C3.
Determine whether the detection risk is high, moderate, or low based off your responses in parts C3 and C4. Justify your response.D. Based off your responses in parts C1–C5, determine an approach to obtaining audit evidence for each of the following assertions, including the percentage of tests of details, analytical procedures, and tests of controls. Justify your responses using the attached “Appendix F: Control Risks and Internal Control Walkthrough”:
existence/occurrence
completeness
valuationE. Acknowledge sources, using APA-formatted in-text citations and references, for content that is quoted, paraphrased, or summarized.F. Demonstrate professional communication in the content and presentation of your submission.

understudies. Given the expected worth of such figures propelling scholastic achievement and hence impacting results like maintenance, wearing down, and graduation rates, research is justified as it might give understanding into non-mental techniques that could be of possible benefit to this populace (Lamm, 2000) . Part I: INTRODUCTION TO THE STUDY Introduction The country is encountering a basic lack of medical care suppliers, a deficiency that is supposed to increment in the following five years, similarly as the biggest populace in our country’s set of experiences arrives at the age when expanded clinical consideration is essential (Pike, 2002). Staffing of emergency clinics, centers, and nursing homes is more basic than any time in recent memory as the enormous quantities of ‘people born after WW2’s start to understand the requirement for more continuous clinical mediation and long haul care. Interest in turning into a medical caretaker has disappeared as of late, presumably because of the historical bac>
GET ANSWER

Share on Facebook

Tweet

Follow us

• WE OFFER THE BEST CUSTOM PAPER WRITING SERVICES. WE HAVE DONE THIS QUESTION BEFORE, WE CAN ALSO DO IT FOR YOU.
• Assignment status: Already Solved By Our Experts
• (USA, AUS, UK & CA PhD. Writers)
• CLICK HERE TO GET A PROFESSIONAL WRITER TO WORK ON THIS PAPER AND OTHER SIMILAR PAPERS, GET A NON PLAGIARIZED PAPER FROM OUR EXPERTS

QUALITY: 100% ORIGINAL PAPER – NO PLAGIARISM – CUSTOM PAPER

Why Choose Us?

How It Works

• Click on the “Place Your Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
• Fill in your paper’s requirements in the “PAPER DETAILS” section.
• Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
• Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
• From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.

About AcademicWritersBay.com

AcademicWritersBay.com is an easy-to-use and reliable service that is ready to assist you with your papers 24/7/ 365days a year. 99% of our customers are happy with their papers. Our team is efficient and will always tackle your essay needs comprehensively assuring you of excellent results. Feel free to ask them anything concerning your essay demands or Order.

AcademicWritersBay.com is a private company that offers academic support and assistance to students at all levels. Our mission is to provide proficient and high quality academic services to our highly esteemed clients. AcademicWritersBay.com is equipped with competent and proficient writers to tackle all types of your academic needs, and provide you with excellent results. Most of our writers are holders of master’s degrees or PhDs, which is an surety of excellent results to our clients. We provide assistance to students all over the world.
We provide high quality term papers, research papers, essays, proposals, theses and many others. At AcademicWritersBay.com, you can be sure of excellent grades in your assignments and final exams.