Business Risk Analysis: Identifying risk in an organization and the environment in which it operates is the first step in approaching a potential audit and designing an effective audit program. To analyze business risk, you must:
o Gain an understanding of Newham
o Investigate the industry in which Newham operates
o Analyze and assess the risk, including fraud, involved in the company and industry
o Identify the relevant PCAOB audit standards and address their relevance to the Newham audit risk assessment
Sample Audit Program: An audit program involves compiling a list (program) of procedures for the auditors to perform in order to obtain evidence and reasonable assurance that internal controls are operating properly and thus producing accurate financial statements. To compile a sample audit program, you have been provided with tests of control in revenue and inventory.
You must identify the relevant PCAOB audit standards and address their relevance to the Newham audit program. Include other elements as applicable to Newham.
Report of Recommendations: Based on an auditor’s experiences and knowledge of accounting, finance, and common errors or pitfalls, it is common for an auditor to provide recommendations. The sample audit program addressed here is merely a small sample, not a comprehensive program. Thus, recommendations for further risk analysis, sample methods, and other concerns should be offered. In your report of recommendations to the head of the new audit team, include the following sections:
o Explanation of findings in the risk analysis
o Sarbanes-Oxley concerns or requirements
o Recommendations on appropriate sampling methods
o Recommendations for preparation and success in the external audit
Guidelines for Submission: Paper must be submitted as a two- to three-page Microsoft Word document with double spacing, 12-point Times New Roman font, one-inch margins, and at least three sources cited in APA format. Round all answers up to the nearest dollar value in any calculations