What additional information might the auditor

Assignment Help Accounting Basics
Reference no: EM13550996

Callie Peters is completing the audit of MakingNewFriends.com for the year ended December 31, 2013. Callie has been the audit manager on this engagement for the past three years. MakingNewFriends.com issued stock two years ago, but has had difficulty establishing a loyal client base and generating advertising revenues. In reviewing results for the current, Callie noted the client has had operating losses for the past three years, and their working capital ratio has declined from 1.2 in 2012 to 0.9 in 2013. Callie discussed plans for the future with the management of MakingNewFriends.com, and they indicated they are planning on obtaining debt financing in fiscal 2014; however, they have not yet secured the financing with a bank. Management also indicated they are aggressively pursuing new advertising contracts and plan to increase advertising revenues bu 20% in 2014.

c.)What factors discussed above are relevant for a going-concern assessment for MakingNewFriends.com? What additional information might the auditor consider in their going-concern assessment?

d.) What responsibility does the auditor have to evaluate whether management's plans will be effective?

Reference no: EM13550996

Questions Cloud

Estimate what is the angular frequency of the oscillation : A 150g glider on a horizontal frictionless air track is attached to a fixed ideal spring with force constant 135N/m. What is the angular frequency of the oscillation
What is his total return in dollars on this investment : Blair purchased 290 shares of stock last year at a total cost of $14,480. He has received a total of $710 in dividends on these shares. Today, Blair sold the shares at a price per share of $46. What is his total return in dollars on this inves..
Design an entity-relationship model of the problem : Design an entity-relationship model of the problem, convert the model into a relational model, and assess the normal form of each schema.
Estimate the number of moles of gas in the vessel : Gas is contained in an 6.4 L vessel at a temperature of 20°C and a pressure of 8.2 atm. Determine the number of moles of gas in the vessel
What additional information might the auditor : What factors discussed above are relevant for a going-concern assessment for MakingNewFriends.com? What additional information might the auditor consider in their going-concern assessment?
Factory overhead : Factory Overhead
Find the final velocity of the three carts after collision : Three carts of masses Three carts of masses m1=6.0 kg, m2=12.0 kg, and m3=5.0 kg move on africtionless horizontal track with speeds of v1 =5.0 m/s, v2 =3.0 m/s, and v3 =-4.0 m/s,as shown in Figure . The carts stick together after colliding. Find t..
Find how much energy does it extract from the outside air : A heat pump has a coefficient of performance of 3.75 and operates with a power consumption of 6.89 103 W. How much energy does it extract from the outside air
The cost recovery method was chosen : The cost recovery method was chosen.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd