Acc410 Audit Plan

1851 Words8 Pages
Audit Plan: Keystone Computers & Networks, Inc. Kandi Conard ACC410: Auditing Jess Stern May 21, 2012 Audit Plan: Keystone Computers & Networks, Inc. Auditing for every company is a very vital part of business. The planning of an audit entails a lot of work on both the auditor’s part and management of the company. An auditor can never know too much about a company and they need to know exactly what the company is looking for in regards to what services are to be performed. First of all, the auditor must develop an audit strategy which will tell them many important things they need to know about the client. Once that is completed, they can develop an audit plan which includes the nature, timing, and extent of the procedures…show more content…
The first red flag would be that they are competing with huge computer companies that can have anything a customer needs readily available to ship. While Keystone seems to be doing a great job keeping up with the demand of certain products, they are forced to charge the customers more money for those products. While this has not currently affected them, it could in the future and could eventually be a problem for them. Another thing is that although business is booming right now, computers businesses do very well when the economic conditions are good. There are reports that say the economy will grow over the next few years (2010), but there is a possibility that they could be wrong and that won’t happen. If the opposite happens and the economy hits a decline, this could really hurt the business of Keystone and many other companies for that matter. On that note, people will start looking to save money and if they can find the same product that this company offers for a cheaper price, they might just do that. The last red flag that I would see when deciding whether to select this client would be the fact that they have recently started extending credit to customers with less than perfect credit (2010). Although this could mean nothing, this could also be the beginning of a downward spiral of bad debt. Just because a person has bad credit doesn’t mean they won’t pay their…show more content…
Going back to the selling to customers with a higher credit risk, while they say that they will review the aging of the accounts receivable on a daily basis, is that possible for Loren to do on top of all the other work that needs to be done? Or in this case would they need to hire another person to take some of Loren’s workload which would in the end cost even more money for the company. In each of these situations they are talking about spending more money to keep away from the risks that are mentioned, but if they get to the point where they are losing money because of the risk and also because of the extra position that they added, they could be in really big trouble
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