Indicate elements that increase and decrease the risk

Reference no: EM132726736

Ben Slama LLP is small auditing firm, and the partner in charge has brought you to a meeting with a prospective new client, Bhatia Excavation (BE). During the meeting, you took the following notes.

BE operates in the residential construction industry. As part of their business, BE's owner admitted that they often accept cash payments from clients. He indicated that this was common practice in the industry and insisted that he personally tracks all cash receipts and properly records them.
Excavation services in the Toronto region are in high demand, which has resulted in significant profit increases year after year. It has, however, put a strain on the company's staff as the owner admitted that her accountant now has to do business development as well as accounting. He also didn't have time to file last year's taxes and hopes we can help with this.
BE follows ASPE and has a restricted set of financial users consisting of the owner, a minority shareholder, and two banks.

Required:

Problem 1: Based on the information above, indicate elements that increase and decrease the risk of accepting the audit engagement. For each risk listed, indicate the implications for Ben Slama LLP.

Reference no: EM132726736

Questions Cloud

Determine what accounts receivable balance at end of july : Morganton Company makes one product, What are the expected cash collections for July? What is the accounts receivable balance at the end of July?

What is text analytics : What is text analytics? How does it differ from text mining? Why is the popularity of text mining as an analytics tool increasing?

What was the yield to call at the time the bonds were issued : Today, G&W called the bonds. If the original investors had expected G&W to call the bonds in 7 years, what was the yield to call at the time bonds were issued

What is the yield to maturity at a current market price : The Brownstone Corporation's bonds have 5 years remaining to maturity. What is the yield to maturity at a current market price

Indicate elements that increase and decrease the risk : Indicate elements that increase and decrease the risk of accepting the audit engagement. For each risk listed, indicate the implications for Ben Slama LLP.

Basic techniques for detecting errors : Explain and describe three basic techniques for detecting errors: parity checking, arithmetic checksum, and cyclic redundancy checksum.

What will be the value of each of these bonds : What will be the value of each of these bonds when the going rate of interest is (1) 5%, (2) 8%, and (3) 12%

What the geraldo inc break-even point in units is : What the Geraldo Inc. break-even point in units is? Geraldo Inc. sells several products. Information of average revenue and costs is as

Demonstrate your understanding of relational databases : Demonstrate your understanding of a relational databases by providing an example of its underlying data model

User Account

All Pages