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Wednesday, March 11, 2020

Analytical Procedures Essays

Analytical Procedures Essays Analytical Procedures Essay Analytical Procedures Essay Essay Topic: Analytical The objective of analytical procedures used in the overall review stage of the audit is to assist the auditor in assessing the conclusions reached and in the evaluation of the overall financial statement presentation. A wide variety of analytical procedures may be useful for this purpose. The overall review would generally include reading the financial statements and notes and considering (a) the adequacy of evidence gathered in response to unusual or unexpected balances identified in planning the audit or in the course of the audit and (b) unusual or unexpected balances or relationships that were not previously identified. Results of an overall review may indicate that additional evidence may be needed. [Paragraph renumbered by the issuance of Statement on Auditing Standards No. 96, January 2002. ] (AU Section 329 Analytical Procedures, 2002) The debt to equity ratio is computed by dividing total liabilities by total stockholder’s equity. The ratio measures how the company is leveraging its debt against the capital employed by its owners. If l liabilities exceed the net worth then in that case the creditors have more stake than the shareholders. The gross margin on net sales is computed by dividing gross profit by net sales. The gross profit margin is a measure of the gross profit earned on sales. The gross profit margin considers the firms cost of goods sold, but does not include other costs. By analyzing changes in this figure, you can identify whether it is necessary to examine company policies relating to credit extension, markups (or markdowns, purchasing, or general merchandising (where applicable). This percentage rate can and will vary greatly from business to business, even those within the same industry. Sales, location, size of operations, and intensity of competition are all factors that can affect the gross profit rate. The current ratio is computed by dividing current assets by current liabilities. The ratio is regarded as a test of liquidity for a company. It expresses the working capital relationship of current assets available to meet the company’s current obligations. Debt to Equity RatioIndustry Average total liabilities= $ 7,589,482. 00 = $ 0. 80 2. 58 total stockholders equity $ 9,520,580. 00 Gross Margin on Net Sales Gross Profit= $ 7,287,064. 00 = $ 0. 8 23. 11% Net Sales $ 26,420,363. 00 Current Ratio Current Assets= $ 16,513,545. 00 = $ 2. 18 1. 21 Current Debt $ 7,589,482. 00 Conclusion: Based on the end of the audit analysis, I believe this business will continue in business. The debt to equity ratio tells me the business isn’t heavily financed by shareholders’. For every dollar of OceanView Marine Company owned by shareholders, OceanView owes $0 . 80 to creditors. The ratio is low compared to the industry average and may indicate the company is not taking advantage of other opportunities that financial leverage may bring. The gross margin on net sales ratio is high compared to the industry average. This ratio reveals how much a company earns taking into consideration the costs that it incurs for producing its products and or services. Higher ratios indicate the company may have more money left over to spend on other business operations. The current ratio is higher than the industry average as well. This is also good because the ratio is mainly used to give an idea of the company’s ability to pay back short-term liabilities with its short-term assets. ? Cash Fraud Article: Phoney MI5 stole ? 4,000 from girlfriend An assistant of an Oxford whisky shop conned his girlfriend out of â‚ ¬14,000 ($20,000) by pretending to be an undercover secret service agent spying on dangerous crimes. Wayne Gouveia convinced his 21 year old girlfriend Leanne McCarthy that he was a MI5 agent sent to protect her. Leanne worked in a nearby jewelry store, Rowell Jewelry in Turl Street, Oxford. Wayne and Leanne began dating in 2007. Wayne showered her with expensive gifts and the couple moved in together. He claimed he could afford so many presents because he also worked as an undercover policeman. Wayne told her his assignment was to protect her during a robbery that her boss was planning to collect insurance payout. He also told her that her boss was trying to poison her with anthrax powder as part of the scheme. He gained her trust by producing a false Official Secrets Act for her to sign. He told her his boss wanted to recruit her as a spy and he took her on fictional security service stake outs. She in turned allowed him to intercept all her mail, including bank cards and PINs because she believed it was laced with anthrax. Wayne was able to scam her out of her savings and financial details to defraud her of ? 14,000. He admitted to three charges of fraud by false representation at Oxford Crown Court. He was convicted March 2009 to an eighteen month sentence. He was 25 at the time of sentencing. Bibliography AU Section 329 Analytical Procedures. (2002). Retrieved November 8, 2010, from Public Company Accounting Oversight Board: http://pcaobus. org/Standards/Auditing/Pages/AU329. aspx#ps-pcaob_5d327f5c-52fb-433d-80d4-8f51565bbfe7 Bonnett, R. (2009, April 10). Fake Spies The Conmen Who didnt Work For MI5. Retrieved December 02, 2010, from Robert Bonetts Blog: http://robertbonnett. com/2009/04/10/the-fake-mi5-spies/ Kelly, T. (2009, February 19). Phoney MI5 spy stole 14000 pounds from girlfriend. Retrieved December 2010, 2010, from Mail Online: dailymail. co. uk/news/article-1148759/Phoney-MI5-spy-stole-14-000-girlfriend. html Three of The Worst Fraud Cases of 2009. (2010, February 23). Retrieved December 02, 2010, from Articlebase: articlesbase. com/print/1896090

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