Assignment task:
Required: You are in the Planning phase of the audit. The engagement partner has asked you to perform analytical to identify potential risks and areas of audit focus in ABC Inc's 2017 financial statements. Perform the analytical procedures on the financial statements and identify issues that you believe require special at 2017 audit.
1. Prepare a Horizontal (Trend) Analysis of the Balance Sheet and Income Statement for 2017 compared to 2016. Show the change in dollars and the percentage change for each Your audit planning materiality indicates that any variances greater than 10% year over year should be further investigated. Identify the potential audit implications for each balance to be investigated.
2. Prepare Common Size Financial Statements (Vertical Analysis) for 2017, 2016 and 2015 Identify fluctuations you believe should be investigated and indicate the potential accounting and/or operating issues that should be investigated.
3. Compute the ratios included on the KPI Ratio Listing for 2017 and 2016. Determine if there are ratios that you should investigate and indicate the potential causes of these ratio changes.
4. Using the information from Steps 1. 2. and 3. above, complete the Interim Audit Finding and briefly state the primary audit procedure(s) you recommend. Hand in Horizontal Analysis Vertical Analysis KPI Ratios Interim Audit Findings