Reference no: EM132983056

Question - Montgomery Glass (MG) a retailer of wood windows and stained glass panels, is planning its year-end audit. You, a CPA, are the audit manager on the file. You are currently working on the audit plan for MG's sales and cost of sales sections.

You have compiled the following information on some of the transactions and events occurring at MG during the year:

Your preliminary analysis of the gross profit margin determined that the gross profit percentage for the current year is 55%, whereas it was 50% in the prior year.

While the sales system is mostly automated, MG will sometimes make large-volume sales to hotel chains. These sales orders are calculated manually and invoices are produced using an Excel invoice template.

MG has made purchases from three vendors in U.S. dollars. The U.S. dollar has increased in value over the last 30 days.

MG made a large online sale before year end. The shipping department has struggled with the volume of online sales, and the shipment of many of the orders was delayed.

Required - Identify the risks for sales and cost of sales at MG and the related assertions. Suggest audit procedures to address the risks.